Just a week after a ‘positive’ meeting between Chief Advisor Dr Muhammad Yunus and Indian Prime Minister Narendra Modi last Friday, the Indian government has cancelled the transshipment facility that allowed Bangladesh to send goods to third countries.
On Monday, April 8, India’s Revenue Department issued a circular stating that the earlier circular (dated June 29, 2020) that granted transshipment facilities to Bangladesh has been withdrawn. This transshipment facility had allowed goods to be sent from Bangladesh to Nepal or Bhutan. Although this route was rarely used in practice, it was considered symbolically important in terms of regional cooperation.
Following the 40-minute meeting between the two leaders on the sidelines of the BIMSTEC summit in Bangkok, Bangladesh released a statement that reportedly drew dissatisfaction from the Indian side. Media reports quoting Indian government sources claimed that Bangladesh’s statement was “politically motivated.” A few days later, the cancellation of the transshipment facility appears to be a signal from Delhi.
A former diplomat commented: “Diplomacy cannot be conducted through the media. On sensitive issues, it is always best to be cautious. There is a tendency on both sides—Bangladesh and India—to use the media for diplomatic messaging. This hinders the development of good relations.”
Another diplomat said: “The facility that India has cancelled had little practical impact. Very few goods were actually transported to Nepal or Bhutan under this system. From that perspective, India’s decision won’t significantly harm Bangladesh, and I believe Delhi is fully aware of that.”
What the Circular Says
The Indian Ministry of Finance’s Revenue Department stated in Circular 13/2025 dated April 8 that Circular 29/2020 (issued on June 29, 2020) is hereby cancelled. With this, the transshipment facility allowing the use of land customs stations to send goods from Bangladesh to third countries has been revoked.
This circular takes immediate effect. However, cargo already inside Indian territory en route to a third country will be allowed to proceed.
A New Phase in Relations
After the political transition in Bangladesh on August 5 last year, relations between Bangladesh and India became somewhat strained. The recent meeting between the Chief Advisor and the Indian Prime Minister was expected to open the door for renewed positive dialogue. However, conflicting media reports in both countries about what was actually said in the meeting have added confusion. Soon after that, the transshipment cancellation was announced.
A former diplomat explained: “Every country has its own constituency. For Bangladesh, the return of Sheikh Hasina is important for its constituency. For India, minority issues are crucial. It’s almost inevitable that these sensitive issues would be discussed in the meeting. But how these internal discussions are presented externally is also very important. In diplomacy, sensitive and evolving issues should always be communicated to the media with extreme caution.”
Notably, when asked on April 8 about whether the return of Sheikh Hasina was discussed, Foreign Affairs Advisor Md. Tawfiq Hossain said: “The issue was raised, but nothing final was decided. That’s all I can say.”
Another diplomat noted: “Improving relations requires effort from both sides. It won’t happen with the initiative of one party alone. Everyone needs to act and speak with restraint.”