India has terminated the transhipment facility that allowed Bangladesh to export cargo to third countries through its land borders.
The Central Board of Indirect Taxes and Customs (CBIC) issued a circular yesterday (8 April) regarding the withdrawal of the facility.
"It has been decided to rescind... circular...dated June 29, 2020, as amended with immediate effect. Cargo already entered into India may be allowed to exit the Indian territory as per the procedure given in that circular," reads the CBIC circular.
The previous circular had allowed transhipment of export cargo from Bangladesh to third countries using Indian Land Customs Stations (LCSs) en route to Indian ports and airports.
Indian think tank Global Trade Research Initiative (GTRI) said with the new circular, the transhipment arrangement has been terminated with immediate effect.
However, cargo that has already entered Indian territory under the earlier system will be allowed to exit as per existing procedures, according to the circular.
According to Indian Express, the move followed Bangladesh's advocacy for extending the Chinese economy into the strategically important Northeast India region.
During his recent China visit, Chief Adviser Muhammad Yunus urged China to establish an economic base Bangladesh and insisted that Bangladesh was the "only guardians of the ocean" for the region.
"The seven states of India…eastern part of India — are called the Seven Sisters. They are a landlocked region of India. They have no way to reach out to the ocean. We are the only guardians of the ocean for this region. So this opens up a huge possibility. So this could be an extension of the Chinese economy…" Yunus said, inviting Chinese investors to Bangladesh.
A number of Indian leaders and scholars including Assam Chief Minister Himanta Biswa Sarma reacted to the chief adviser's comment.
They labeled the statement as "offensive, strongly condemnable and provocative."
"Bangladesh's plans to establish a strategic base near the Chicken's Neck area with China's assistance may have prompted this action. Bangladesh has invited Chinese investment to revitalise the airbase at Lalmonirhat, near India's Siliguri Corridor," Indian Express quoted Ajay Srivastava, former trade officer and head of GTRI.
With the new circular, the transhipment arrangement has been terminated with immediate effect. However, cargo that has already entered Indian territory under the earlier system will be allowed to exit as per existing procedures
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The National Board of Revenue (NBR) has restricted the import of yarn through land ports to protect the local textile and spinning sector, according to a notification with immediate effect.
The decision comes just over two weeks after the commerce ministry recommended limiting such imports, citing that an influx of raw materials for the apparel industry had led to significant losses for domestic textile millers.
Local manufacturers are unable to compete with imported yarn, as importers often declare lower values for shipments brought in through land ports compared to those arriving via Chattogram port, the ministry said.
The recommendation followed pleas from local textile millers.
In the notification issued on April 13, the revenue board blocked yarn imports through the Benapole, Bhomra, Banglabandha, Burimari and Sonamasjid land ports. The restriction takes immediate effect.
The government had allowed yarn imports through these ports in January 2023 to meet an abrupt surge in demand following the Covid-19 pandemic.
Meanwhile, India last week
revoked the transshipment facility for Bangladesh's export cargo destined for third countries via its land borders to Indian airports and seaports.
However, the neighbouring country claimed that the move would not affect Dhaka's trade with Nepal and Bhutan through Indian territory.
The measure is expected to increase costs for Bangladesh's apparel exporters, many of whom ship orders to Western markets through Indian airports, particularly Indira Gandhi International Airport in New Delhi.
Previously, exporters transported goods overland through the Benapole–Petrapole border en route to Indian airports, including those in Kolkata and Delhi, for onward air shipment to global destinations.
The recommendation followed pleas from local textile millers.
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