India hits back with $770 million trade ban on Bangladesh

India has imposed a trade ban on Bangladeshi imports worth $770 million, nearly 42% of total bilateral trade.

The Global Trade Research Initiative (GTRI) states this move is a strategic response to Bangladesh’s rising import restrictions on Indian goods and its increasing diplomatic alignment with China, reflecting deeper geopolitical tensions.

The Union Ministry of Commerce and Industry issued the ban order on May 17. The decision targets major categories such as readymade garments, processed food, and plastic products.

GTRI noted that these steps are not arbitrary but a strategic counter to Dhaka’s earlier actions.

Garments, which account for $618 million annually, now must enter India only through the Kolkata and Nhava Sheva seaports.

This move cuts off critical land trade routes traditionally used by Bangladeshi exporters. It follows DGFT’s recommendations and reflects India’s growing concerns over Dhaka’s shifting policies.

Since late 2024, Bangladesh has tightened trade with India. In April 2025, it banned Indian yarn at five major land ports.

It also restricted rice exports and blocked several Indian goods, including tobacco, fish, and milk powder.

These curbs have caused delays, stricter inspections at Bangladeshi ports, and growing frustration among Indian exporters due to disrupted trade flows.

India responded by revoking a key trans-shipment facility granted to Bangladesh in 2020.

This facility allowed Dhaka to send goods to Europe and the Middle East via Indian routes, including Delhi Airport.

The privilege was cancelled on April 9, except for trade going to Nepal and Bhutan.

Tensions rose further after a controversial remark by Mohammad Yunus, chief advisor to Bangladesh’s interim government.

During a visit to China in March, he said that Bangladesh controls ocean access for India’s northeastern states. This statement, seen as provocative, further strained bilateral ties.

India’s latest trade restrictions mark a clear shift in policy, blending economic strategy with geopolitical signalling.

Image Credit: Kaim Amin (This version), CC BY-SA 4.0, via Wikimedia Commons

This file was derived from: Indischer Subkontinent.svg

Image Reference: https://commons.m.wikimedia.org/wiki/File:Indian_Subcontinent_Tri-Nation_Political_Map-bn.svg