Introduction: A Supply Chain Shock That Exposed a Larger Problem
The story of Bangladesh’s transit crisis in 2025 begins not in a policy meeting, but in a small warehouse in Narayanganj. Before sunrise, Ayesha, a jute-product exporter, stood before the neat rows of cartons ready for Europe. For her, the Indian transshipment route was not an abstract diplomatic matter. It was the channel that kept her orders on time, her customers satisfied, and dozens of families dependent on her business. When India abruptly halted the transshipment facility in April 2025, her supply chain collapsed overnight. With shipment costs rising by nearly 40 percent and seasonal deadlines slipping away, she now faces the real possibility of losing a long-term buyer.
Her struggle reflects a much wider problem. Bangladesh’s export engine, particularly the garment sector, is deeply intertwined with regional logistics. India’s unilateral suspension of a key corridor has forced exporters to scramble for alternatives—rerouting through Colombo, relying heavily on Dubai for urgent consignments, and overloading domestic airports not designed for this sudden surge. Even after emergency upgrades in Sylhet and Dhaka, the industry remains burdened with rising costs and shrinking delivery windows. Major brands operating in Sylhet now depend on chartered flights simply to keep production timelines intact.
In a sector that exported nearly USD 36 billion last year, even small shocks create ripples across thousands of factories and millions of workers. But this shock was not small. It revealed how vulnerable Bangladesh’s trade still is, how easily its earnings can be disrupted, and how fragile regional cooperation becomes when reciprocity is missing. It is a moment of reflection: can Bangladesh trust a transit system where one side can withdraw a lifeline without warning? And more importantly, what should the country do now, when its export competitiveness is directly tied to political decisions beyond its control?
This crisis also raises a deeper question. Is the current structure of Bangladesh–India economic relations truly balanced, or has it evolved into a system where Bangladesh carries a heavier burden while receiving fewer tangible benefits? Understanding this imbalance is essential to shaping a more stable and fair future for cross-border trade.
The Broken Promise of Mutual Benefit
When the transit arrangement was formalised, policymakers on both sides described it as a milestone in regional cooperation. Bangladesh expected that easier access to ports and markets would help diversify exports and strengthen ties. India, in turn, would use Mongla and Chattogram ports to ship goods to its Northeastern states, generating activity that could encourage infrastructure development inside Bangladesh. At the time, the arrangement was sold as a partnership of shared gains, not a unilateral concession.
But the outcome paints a different picture. Bangladesh’s export earnings in the Indian market have not improved in any meaningful way. In the last financial year, bilateral trade reached USD 14.01 billion, but Bangladesh exported only USD 1.97 billion while importing USD 12.00 billion. This deficit has been consistent for years. Even with duty-free and quota-free access under SAFTA, Bangladeshi exporters continue to face obstacles ranging from lengthy port delays to state-level taxes, unpredictable administrative checks, and shifting local restrictions.
Recent measures have made the situation more difficult. Several Bangladeshi products—including jute sacks, woven synthetic cloth, and jute ropes—were suddenly barred from entering India through land ports and redirected to Mumbai’s distant Nhava Sheva port. This increases shipping costs several times over, eroding competitiveness for small producers who cannot afford expensive routes. In addition, India has expanded restrictions on clothing and apparel items, now blocking seven categories of Bangladeshi exports across 13 land ports.
India defends these actions as necessary for protecting its domestic industries. But for Bangladesh, they serve as a reminder of how swiftly Indian trade policies can shift when internal pressures rise. Meanwhile, Bangladesh has upheld its transit commitments without interruption. The imbalance is not only economic; it is institutional. India’s decisions often reflect its internal priorities, while Bangladesh continues to behave as though transit access is a diplomatic duty rather than a mutual arrangement.
This raises the central question: why should Bangladesh maintain an agreement that remains vulnerable to unilateral changes and does not guarantee reciprocal access? And more importantly, how can the country reorganise its approach so that exporters like Ayesha do not carry the burden of foreign decisions they cannot control?
The Roots of an Unequal Framework
Bangladesh–India relations have long operated in a system where key issues—transit, water sharing, security cooperation, and power imports—are shaped less by formal agreements and more by political signals and expectations. These patterns became even more pronounced under the previous government, when strategic dependence was framed as a symbol of regional strength rather than a matter requiring negotiation and balance.
This informal approach weakened Bangladesh’s ability to secure reciprocal benefits. Agreements were frequently asymmetrical, allowing India wide operational access while Bangladesh faced delays, restrictions, and administrative bottlenecks whenever it attempted to expand its own market share. The transit crisis is therefore not a standalone event but part of a larger trend where Bangladesh’s economic space is constrained by an unequal framework.
The story of Ayesha illustrates how these imbalances reach the ground. She employs local artisans and supports a network of families who rely on her orders. Her supply chain is modest but efficient. When India withdrew the transshipment facility, her entire business model came under threat. She now struggles not because her products are uncompetitive but because a key link in her logistics chain lies outside her control.
Across Bangladesh, hundreds of exporters face similar pressures in jute, garments, leather, and light manufacturing. Their common challenge is not only market access but a broader system where the rules can shift overnight. If India prioritises its domestic industries, Bangladesh must also act to protect its own. Reciprocity does not mean confrontation; it means fairness. It means ensuring that agreements reflect balanced costs and benefits.
Recognising this imbalance is the first step toward building a more resilient economic partnership—one where transit is treated not as a political gesture but as a commercial service governed by clear, enforceable rules.
Towards a More Balanced Transit Policy
If India’s new transit rules reflect domestic priorities, Bangladesh must also adopt a clear and realistic strategy. This is not about withdrawing cooperation but about designing a system that protects Bangladesh’s interests while maintaining regional stability. The first step is to redefine transit as a paid commercial service. Cargo passing through Bangladesh should pay fees that match the real costs—environmental impacts, road maintenance, security monitoring, and administrative oversight. Many countries charge for such services, and Bangladesh has the right to do the same.
Reciprocity must also be operational. If Indian trucks can move freely through Bangladesh, then Bangladeshi trucks should enjoy the same access on Indian roads. This is not a demand beyond reason; it is the basis of any balanced transit arrangement. Both countries benefit when movement is predictable, regulated, and fair.
Second, Bangladesh must address non-tariff barriers in a structured way. Future trade and transit agreements should include mechanisms that identify these barriers and set timelines for reducing them. Without such provisions, non-tariff barriers will continue to choke Bangladesh’s export potential even when tariffs are low or zero.
Third, Bangladesh requires stronger negotiation capacity. Establishing a permanent Transit and Trade Commission—a body of economists, legal advisors, environmental planners, and geopolitical analysts—would help ensure continuity, expertise, and informed decision-making. Transit is not merely a logistical matter. It involves national security, regional diplomacy, environmental concerns, and long-term economic planning. A specialised institution is essential for managing these complexities.
Finally, Bangladesh should use this moment to seek a renewed dialogue with India. This conversation must reflect the interests of both countries but should be grounded firmly in Bangladesh’s priorities. Cooperation is most sustainable when it is balanced. Reciprocity is not hostility; it is stability. A transit system built on fairness is one that can endure economic shifts, political changes, and domestic pressures on either side.
Conclusion: The Future of Partnership Depends on Balance
The crisis of 2025 has revealed more than a logistical gap. It has exposed a structural imbalance in Bangladesh–India economic relations. exporters like Ayesha should not struggle because agreements fail to protect their interests. Bangladesh must now shape a transit policy grounded in commercial reality, institutional strength, and clear reciprocity. A balanced partnership will not weaken regional cooperation; it will strengthen it. If the two countries build a system based on fairness, predictability, and mutual respect, the benefits will extend far beyond transit corridors and trade statistics.
