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India has withdrawn transit facility extended to exporters from Bangladesh to use Indian land routes including ports and airports  –  with immediate effect.

Randhir Jaiswal, the Official Spokesperson of the Ministry of External Affairs (MEA) in his weekly presser added that exporters from Bangladesh will continue to use Indian roads for their movement of goods to Nepal and Bhutan.

It may be recalled that transit facility to Bangladesh exporters was granted in 2020.

Randhir Jaiswal stated  – “The trans-shipment facility extended to Bangladesh had over a period of time resulted in significant congestion at our Airports and Ports. Logistical delays and higher costs were hindering our own exports and creating backlogs.

“The facility, therefore, has been withdrawn with effect from 8th April 2025,”  the MEA spokesperson added while reiterating that these measures do not impact Bangladesh’s exports to Nepal and Bhutan transiting through Indian territory.

Earlier the Central Board of Indirect Taxes and Customs (CBIC) issued a circular dated 8th of April 2025 announcing that New Delhi is rescinding the use of its facility for export via its land routes with immediate effect, the Daily Star reported.

The CBIC circular announced it was rescinding with immediate effect, an earlier circular dated June 29, 2020, that allowed the transhipment of export cargo from Bangladesh to third countries through the Land Customs Stations (LCSs) to Indian ports or airports in containers or closed-bodied trucks.

“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, according to Business Standard BD.

This move could lead to debilitating impact on the shipment of Bangladesh’s readymade garments along with other exports to third countries, as Dhaka is almost entirely dependent on New Delhi’s infrastructure for conducting all its land-based trade and commerce with third countries.

The Apparel Export Promotion Council (AEPC) of India had been lobbying for the removal of this facility, since both countries are direct rivals in textile exports.

Eliminating the facility is seen as a step to ease congestion at Indian airports and support the domestic exporters, according to AEPC Chairman Sudhir Sekhri, who added that disruptions in maritime commerce due to the Red Sea crisis and rampant piracy have prompted exporters to switch from sea to air, further inflating logistics expenses, as per the Dhaka Tribune.