Indian government has withdrawn the transshipment facility that allowed Bangladesh to export goods to third countries using Indian land customs stations, ports and airports.

The Central Board of Indirect Taxes and Customs (CBIC) issued a notification on Tuesday, announcing the rescinding of Circular No. 29/2020-Customs dated 29 June 2020, which had governed the movement of Bangladeshi export cargo in containers or closed-bodied trucks through Indian territory to international destinations.

According to the circular published on the CBIC’s official website, the facility has been withdrawn with immediate effect.

However, cargo that has already entered India under the previous arrangement would be allowed to exit the country following the procedures outlined in the now-rescinded circular.

The move comes at a time of heightened global trade tensions, with the United States imposing sweeping tariffs on several countries, including India and Bangladesh.

Confirming the decision, Indian external affairs ministry explained ‘The transshipment 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 The facility, therefore, has been withdrawn with effect from 8 April 2025.’

The external affairs ministry also clarified that the decision would not impact Bangladesh’s exports to Nepal or Bhutan that transit through Indian territory.

The transshipment facility was originally introduced in June 2020 during the Covid pandemic.

Terming Indian decision ‘unexpected,’ economist Mustafizur Rahman said that it remained unclear whether the Indian authorities had informed Bangladesh in advance about the move.

He observed that the termination of the transshipment facility is unlikely to have a significant impact on Bangladesh’s exports, as the facility had not been widely utilised.