Why did Muhammad Yunus, chief adviser to the Bangladesh Interim Government, ask New Delhi not to use land ports to export yarn to Bangladesh? Would it not damage the country’s textiles and ready-made clothing businesses, thus disappointing thousands of jobs?
India-Bangladesh Transport Facilities
Can Bangladesh afford the trade war with India? How does it fight this war with its largest trading partner? If it weren’t for a trade war, why did Muhammad Yunus, chief adviser to the interim government, ask New Delhi not to use land ports to export yarn to Bangladesh? Would it not damage the country’s textiles and ready-made clothing businesses, thus disappointing thousands of jobs?
Bangladesh hits India, stops using land ports
Political analysts and business experts are both upset by the latest decisions of South Asian governments that border India. In a decision that could have far-reaching consequences, the National Taxation Commission of Bangladesh (NBR) suspended imports of yarn from India, through land ports in Benapole, Bhomra, Sonamasjid, Banglabandha and Burimari. It said it had decided to address the concerns of the domestic textile sector on false claims and unfair competition.
This is a decision to India’s decision to cancel transshipment facilities, in addition to exports to Nepal, Bangladesh and Myanmar. A spokesman for India’s MEA clarified that the facility was taken back because it blocked Indian ports and caused problems for domestic exporters. But the decision was announced after Muhammad Yunus said in China that seven Indian countries were inland and that Dhaka was the natural guardian of the region’s oceans. He also added that China should expand its economy to Bangladesh.
Why did Muhammad Yunus disturb India?
Getting along with New Delhi was not going well, Foreign Minister S. Jaishankar reminded Yunus that India has the longest coastline in the Bay of Bengal at the Bimstec summit in Bangkok.
Textile mill owners are upset about the government’s decision, although the yarn manufacturers are happy, according to Bangladeshi media. India exports of cotton yarn worth US$1.6 billion, and artificial fibers worth US$85 million in 2023-24 globally. However, more than 45% of the export arrival cards are available. New Delhi also exports these yarns to China, Vietnam, Indonesia, Taiwan, Thailand and other countries. Textile mill owners believe that China can now take advantage of this situation and dump its low-quality, cheaper products in Bangladesh.
Does Bangladesh want eggs?
Ready-to-shelf clothing is the largest of Bangladesh’s total exports. Ready-to-shelf clothing exported by Dhaka is worth US$47 billion in 2022-23 years. As India blocks Bangladesh from exporting these products using its airports and seaports, Dhaka is most likely to suffer as its exports may become more expensive and late.
Bangladesh’s total exports reached US$55.8 billion in 2022. In 2023, Bangladesh’s exports reached US$55.79, and then fell to US$50 billion in 2024 due to political turmoil.
India – Bangladesh bilateral trade
New Delhi exported 5,620 commodities to Bangladesh, worth USD 11.06 billion in fiscal 24, and exported at USD 12.21 billion in fiscal 223. On the other hand, India imported 1,012 commodities worth $2.8 billion in fiscal 24 and $2.02 billion in fiscal 23. Dhaka exports items of paper and cardboard, pulp, paper and wood board; salt, sulfur, soil, stone, gypsum, lime and cement; raw skin and skin (except fur); and leather to India.
India is Bangladesh’s largest trading partner, with a surplus of US$10.01 billion in fiscal 2024. Rather than trying to reduce the trade deficit with India, choose to hit and take its biggest out-of-export, ready-made clothing into danger.
