After acidification of tires, the interim government in Bangladesh imposed restrictions on Indian exports. Last week India hit back with its own measures. Mint Looks at the impact on bilateral trade and which of the two are more suffering from this dispute.
What is the last in this trade war?
On Saturday, India announced large import route restrictions on goods from Bangladesh. These curbs are aimed at more than $ 770 million or 42% of all exports from Bangladesh. The eastern neighbor can now only export Readymade clothing (RMG) via Kolkata and Nhava Sheva -gates.
Almost 93% of his RMG export came through 11 land border in the northeast that are closed. Latish poles are also closed for other goods such as carbonated drinks, processed food, wooden furniture, PVC goods and cotton waste. The move is a response to import restriction that Bangladesh has imposed on Indian export.
What are those limitations?
Bangladesh has been imposing restrictions for Indian export since the end of 2024. In April of this year, it forbade Indian Cotton Yarn's import through five major land ports. It scooped curbs on rice shipments and forbade dozens of Indian goods, including paper, tobacco, fish and powdered milk. It also introduced a transit costs of 1.8 Taka per tonne per kilometer on Indian goods that move through its territory. These signal a clear deviation from the cooperation in the past. That Indian exports was subject to stricter port inspections that caused operational delays. The movements will harm trade between the two nations.
Read also | Bangladesh Dollar Trade to be hit by the port restrictions of India, can lose $ 770 million
What is the state of bilateral trade?
It became a peak of $ 18.2 billion in 2021-22 but has since been taken (see graph). In April-Februari 2024-25 it was $ 12.2 billion. The export of Indian goods was worth $ 10.4 billion and the import was $ 1.8 billion. India exports cotton, cotton yarn, oilmeals, herbs, technical goods and chemical products. Bangladesh exports RMGS, Home Textiel, Jute and Jute products, etc.
What is the state of bilateral trade?
It became a peak of $ 18.2 billion in 2021-22 but has since been taken (see graph). In April-Februari 2024-25 it was $ 12.2 billion. The export of Indian goods was worth $ 10.4 billion and the import was $ 1.8 billion. India exports cotton, cotton yarn, oilmeals, herbs, technical goods and chemical products. Bangladesh exports RMGS, Home Textiel, Jute and Jute products, etc.
What happened to the friendly ties?
It was peer -shaped with the resignation of Sheikh Hasina as Prime Minister of Bangladesh in August 2024. Her government had good ties with India. Bangladesh benefited from generous trade conditions, allowing it to export everything with alcohol and tobacco with zero duty to India. A strong anti-India sentiment shifted her government and she sought refuge in India. The interim government that has replaced her has sought its extradition and has come closer to China in an attempt to sniff India.
Read also | India stops the transit facility for the export of Bangladesh while re -assessing trade and safety
Who wants to lose in this dispute?
Experts say that by mixing politics and trade Bangladesh has shot in the foot. Having a large market like India next door is a big advantage. In April-Febrarari 2024-25 it exported items of clothing worth $ 618 million to India and this question will only grow. Bangladesh had an advantage because it could import fabrics from China on zero duty, which indian companies cannot and convert it to clothing and to India at a competitive price. Recent measures will limit exports and open the market for domestic players.
