April 10, 2025
DHAKA – NOTE: This article was prepared before further clarification was provided by the Indian Ministry of External Affairs that the transshipment withdrawal measures “do not impact Bangladesh exports to Nepal or Bhutan transiting through Indian territory”.
A former lead economist of the World Bank in Dhaka said India’s decision to suspend transshipment facilities for Bangladesh was unfortunate and unnecessary. He said this decision did not quite follow the usual protocol or etiquette and points out that contrary to what many had thought, India-Bangladesh relations are appear set to become cooler despite the Yunus-Modi meet.
“This is unfortunate. It’s going to hurt Bangladesh, Nepal, and Bhutan. I don’t understand what benefit India is getting from this or why they are doing this,” said Zahid Hussain, a former lead economist of the World Bank’s Dhaka office.
Stating that air routes are the only alternative to land routes, the veteran economist said, “But air transport is very expensive compared to land routes. Also, handling the volume is quite difficult. So, this will become a major obstacle.”
“For other types of trade, especially in services, there shouldn’t be much impact, since the service trade volume is relatively low. But goods trade will be significantly disrupted, and the loss will mostly affect Nepal and Bhutan because they used to import goods from us and sell them in their markets,” he said.
He added, “These are much smaller economies compared to ours — if, say, a few million dollars’ worth of imports from Bangladesh to Nepal suddenly stops, it will clearly impact their inflation, supply chain, and essential goods. And we will lose our earnings as well.”
He said that in such cases there are protocols, diplomatic etiquette to follow.
“But in this case did we see any indication before this announcement that something like this was about to happen? No letter was sent to our foreign ministry from India. Even after Modi’s recent meeting, we thought perhaps the ice was beginning to thaw. But now it seems to have frozen again,” added Hussain.
“This move is completely unnecessary, especially at a time when the whole world, including India, is busy dealing with the US tariff war. And now, they’re creating another point of tension — it may look small, but it’s an unnecessary tension created unilaterally. It’s hard to fathom.”