India's Ban on Trans-shipment Facility for Bangladesh's Exports- Not A Violation of WTO Norms, Says MEA Official

An official from the Ministry of External Affairs (MEA) clarified that India's recent decision to suspend the trans-shipment facility for Bangladeshi export cargo passing through Indian land customs stations cannot be considered as breaching World Trade Organization (WTO) regulations.

"It will be wrong to say India is violating WTO norms. Because the norms are only for landlocked countries. And Bangladesh is not a landlocked country, " said an official from MEA.

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The recent notice issued by the government of India has halted the use of Indian territory for the transit of Bangladesh’s goods to third countries, including Bhutan, Nepal, and Myanmar. This move has sparked concerns over potential disruptions in regional trade and India’s adherence to WTO commitments. According to Article V of the General Agreement on Tariffs and Trade (GATT) 1994, WTO members are required to ensure the free transit of goods through their territories, particularly for landlocked nations, without imposing undue delays or duties.

"One of the reasons behind the halt to the transshipment facility previously extended to Bangladesh is the excessive congestion happening along the border area," said the official.

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India has always advocated for the BBIN (Bangladesh-Bhutan-India-Nepal) transport agreement, which allows nearly all Bangladeshi products, with the exception of alcohol and cigarettes, to move freely to India’s neighboring countries. However, this latest decision comes at a time of heightened security concerns, as there were reports of China planning to construct an airfield in Bangladesh's Lalmonirhat district. This development could pose a strategic challenge to New Delhi’s interests along its eastern border, particularly in the sensitive Chicken’s Neck region.

The trans-shipment route has been in use since 2020, providing Bangladesh access to markets in several countries like Bhutan, Nepal, and Myanmar. Yet, Indian exporters, particularly in the apparel sector, have expressed their grievances over the arrangement. Sudhir Sekhri, Chairman of the Apparel Export Promotion Council (AEPC), previously opposed the facility as he highlighted that the arrival of 20-30 Bangladeshi trucks daily in Delhi had led to congestion at cargo terminals and an increase in freight costs.

"It has been decided to rescind... circular...dated June 29, 2020, as amended with immediate effect. Cargo already entered into India may be allowed to exit the Indian territory as per the procedure given in that circular," stated the Central Board of Indirect Taxes and Customs' circular.