India Tightens Border Trade With Bangladesh, Restricts Some Fabric Shipments to Ocean Routes

India is imposing further restrictions on Bangladeshi exporters, preventing them from shipping certain materials including woven fabrics, jute and flax yarn through its land ports.

The move, established by the country’s Directorate General of Foreign Trade on Friday, follows the decision in May to halt Bangladesh’s readymade garments (RMGs), cotton and cotton yarns from entering the country via the land ports. That ban also excluded items such as processed foods, plastics and wooden furniture.

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The new list of restricted items is currently comprised of jute goods, hemp yarn, jute single yarn, twisted yarn, woven fabrics and unbleached jute fabrics.

These imports will only be allowed entry into India using ocean freight via the Nhava Sheva Port (also known as Jawaharlal Nehru Port) in Mumbai. Similarly, the May edict only allowed garments to pass through the Nhava Sheva and Kolkata seaports.

The restrictions will not apply to Bangladesh exports to Nepal and Bhutan transiting through India. However, re-export of those goods from Nepal and Bhutan back to India will not be allowed.

As the countries’ relationship has declined since the ouster of Prime Minister Sheikh Hasina last August, India and Bangladesh have gone back and forth with implementing more protectionist measures when it comes to trade along the countries’ shared border. In April, Bangladesh halted the import of yarns entering the country via its own land ports. While that decision didn’t directly target India, 95 percent of Bangladesh’s yarn imports originate from its neighbor.

That same month, India revoked Bangladesh’s access to often-used transshipment services. This service previously allowed Bangladeshi exporters to ship goods across the border using India’s customs stations en route to Indian ports and airports, where the freight would be transported to third countries. However, these goods were taking up cargo space on Indian airlines, further incentivizing the country to cut off access to make room for its own exports.

In a similar vein to Bangladesh’s yarn import ban, India’s actions are designed to bolster its domestic jute industry, which the country claims has been hampered by competition from duty-free Bangladeshi jute that enters its borders. Jute is a rough fiber used for making twine or rope, carrying similar qualities to hemp. The sustainable fabric can be used in the manufacturing process for bags, upholstery, carpets, packaging and even clothing.

“Artificially depressed prices caused by subsidized imports have had a direct and adverse impact on the income of jute farmers,” an Indian government official told The Indian Express.

Conversely, Bangladesh’s exporters are now concerned of losses to their businesses, as well as the added logistics costs and transit times that they would encounter by needing to transport the fabrics exclusively via ocean freight.

The decision will affect 117 exporters who shipped goods via land routes, according to a report from Indian publication The Week.

“Our jute exporters have become victims of politics, as bilateral relations between Bangladesh and India are currently strained,” Mirza Koushik Ahmed, executive director of Reliance Jute Mills Ltd., told Bangladeshi publication The Daily Star.

Ahmed voiced his displeasure with the choice, saying that the route to the Nhava Sheva Port was not commercially viable for exporting jute products. The port is on India’s west coast, essentially on the opposite side of the country from where it and Bangladesh share a border.

Farhad Ahmed Akanda, chairman of the Bangladesh Jute Association, told The Daily Star that most of its buyers were based in Kolkata, which is only 51 miles from the Petrapole-Benapole land port on the border of both countries.

“Our buyers are pursuing the Indian authorities to allow shipments through Kolkata,” he said, adding that no buyer has cancelled orders until now.

Akanda noted that it would be more convenient for buyers if India allowed shipments through Kolkata’s seaport, like it is still doing with garments.

“The cost for our buyers will increase because they will have to take delivery from the [Nhava Sheva] port,” Akanda said. “Besides, our cost of shipment through the Chattogram and Mongla ports will rise.”

Bangladesh’s total exports of jute products declined by 4.1 percent throughout the 2024-25 fiscal year, according to data released from the country’s Export Promotion Bureau (EPB) on Tuesday.

Overall, Bangladesh’s total exports grew by 8.6 percent in the recently concluded fiscal year, reaching $48.3 billion, the EPB said.

The growth came despite a 7.6 percent drop in exports in June, as the Eid al-Adha holiday in early June shuttered factories and the country dealt with a scattered strike of tax and customs workers that stopped operations at Chattogram Port for two days.

The RMG sector continued to show global export strength with 8.8 percent growth for the year to $39.3 billion, encompassing 81.4 percent of total exports.