Online Desk  :   In a move that has sent ripples through Bangladesh’s export-driven economy, India has imposed a sudden ban on several key Bangladeshi goods – including garments, processed foods, plastics, and more – entering via land ports, effectively choking off the most accessible trade route between the two neighbours. The decision, announced last Saturday, has sparked alarm among exporters and policymakers in Dhaka, who see it as a potential escalation in a series of tit-for-tat trade restrictions. Yet, in a striking display of restraint, Bangladesh’s Commerce Ministry is steering clear of retaliatory countermeasures, opting instead for diplomatic negotiations to resolve the crisis and safeguard bilateral ties.

A trade route under siege : Land ports have long been the lifeblood of Bangladesh-India trade, offering a cost-effective and efficient channel for exporting goods to India, Bangladesh’s second-largest trading partner after China.  The garment industry, which accounts for over 80 per cent of Bangladesh’s export revenue, relies heavily on these routes to supply India’s massive market. Processed foods and plastics also feature prominently, supporting livelihoods and fuelling economic growth. India’s abrupt ban, which targets these critical sectors, threatens to disrupt supply chains, inflate costs, and erode market share for Bangladeshi exporters already grappling with global competition and domestic challenges.

The timing of the ban adds to the unease. It follows a string of reciprocal trade barriers: in April, India withdrew transshipment facilities that allowed Bangladeshi goods to reach third countries via Indian ports, a move that hit exporters hard.  Bangladesh responded by halting yarn imports from India through land ports, a decision that irked Indian textile producers. Indian media outlets are trying to frame the latest ban as an outright countermeasure to Bangladesh’s yarn restrictions, painting it as the latest salvo in an escalating trade skirmish. For Bangladesh, the stakes are high – exports to India were valued at $2 billion in 2024, and any prolonged disruption could dent economic growth and exacerbate unemployment in key sectors.

Diplomacy over retaliation : Despite the provocation, Dhaka is choosing dialogue over confrontation. Senior Commerce Ministry officials, speaking to Jago News, suggested that India’s ban might be a “reciprocal move” tied to the recent yarn dispute or earlier non-tariff barriers imposed by both sides. However, they stressed that retaliating with new restrictions would only deepen the rift, harming both economies. Commerce Secretary Md Mahbubur Rahman articulated this stance with clarity: “India acted unilaterally, but counter-sanctions aren’t the answer. That path breeds hostility and hurts trade for both sides. We’re assessing the damage to our exports and will seek a resolution through diplomatic talks.”

“One country’s action, followed by another’s counteraction, creates a cycle of animosity,” he told Jago News. “We want to strengthen ties, not weaken them.” To this end, the ministry is mobilising multiple platforms for engagement. It has proposed discussions through the CEO Forum, a bilateral body that brings together policymakers and business leaders from both nations to address trade bottlenecks. Additionally, Bangladesh plans to raise the issue in upcoming regional trade dialogues, leveraging forums like the South Asian Association for Regional Cooperation (SAARC) to advocate for free-flowing trade.

A high-stakes meeting to chart the course : To hammer out a cohesive response, the Commerce Ministry has called an emergency inter-ministerial meeting on Tuesday. The meeting will bring together a formidable lineup of stakeholders: representatives from the Ministry of Shipping, Ministry of Foreign Affairs, Bangladesh Trade and Tariff Commission, National Board of Revenue, Bangladesh Land Port Authority, Export Promotion Bureau, and National Consumer Protection Directorate. Industry leaders from the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Bangladesh Garment Manufacturers and Exporters Association (BGMEA), and India-Bangladesh Chamber of Commerce and Industry will also attend, ensuring that the private sector’s concerns shape the government’s strategy.

Ayesha Akhter, Additional Secretary of the Foreign Trade Division, emphasised the collaborative nature of the effort: “This decision impacts multiple stakeholders, from exporters to logistics providers. We’ll issue clear directives after the meeting to guide our next steps.”  The meeting’s agenda includes assessing the ban’s economic impact, identifying alternative export routes (such as sea ports), and crafting a diplomatic playbook to restore land port access. There’s also talk of exploring trade diversification to reduce reliance on India, though such a shift would take years to materialise.

Economists sound the alarm : Bangladesh’s economic think tanks and trade experts are urging caution, warning that a misstep could exacerbate the crisis. Zaidi Sattar, Chairman of the Policy Research Institute, traced the current standoff to a dangerous pattern of retaliation: “India cancelled transshipment, we stopped yarn imports, and now they’ve closed land ports. This cycle is unsustainable. We don’t have the market power to play this game without shooting ourselves in the foot. Diplomacy is our best bet.”

He called on the government to prioritise negotiations and avoid measures that could alienate India, a key supplier of raw materials and a major consumer market.

Selim Raihan, Executive Director of the South Asian Network on Economic Modelling (SANEM), highlighted the broader implications: “Non-tariff barriers like this ban create a ripple effect, raising costs for exporters and undermining regional trade integration. If unresolved, this could set back SAARC’s trade liberalisation goals by years.”

He called for a regional approach to trade disputes, suggesting that Bangladesh rally support from other South Asian nations to pressure India into rolling back the ban.

Dr Zahid Hossain, former Chief Economist at the World Bank’s Dhaka office, stressed the need for transparency: “Bangladesh must demand a clear explanation from India about the ban’s rationale. Bilateral talks should focus on mutual accountability and trust-building. Without that, we’re just lobbing trade barriers at each other.”

He suggested that Bangladesh leverage its growing global trade clout – particularly its success in ready-made garments – to negotiate from a position of strength.

A region on edge : The ban has reignited debates about India’s influence over South Asian trade and its willingness to flex its economic muscle. Indian media outlets, citing government sources, portraying the ban as a response to Bangladesh’s “protectionist” yarn restrictions, a claim Dhaka disputes. The narrative underscores the unequal power dynamics in the relationship – India’s $1.4 trillion economy dwarfs Bangladesh’s $460 billion GDP, giving Delhi a clear edge in trade disputes.  Yet, Bangladesh’s strategic importance as a manufacturing hub and its deepening ties with China give it leverage to push back, albeit carefully.