Context:
- Transshipment facility was initiated by India in 2020 to support Bangladesh’s exports to Nepal, Bhutan, and Myanmar via Indian ports and airports.
- It aimed to facilitate regional connectivity and ease logistical challenges for landlocked neighbors.
Relevance : GS 2(International Relations)
What is Transshipment?
Transfer of cargo at an intermediate port from one vessel/transport mode to another before reaching the final destination.
- Commonly used when direct shipping routes are impractical or uneconomical.
- Essential for landlocked countries (like Nepal and Bhutan) and countries with limited port capacity (like Bangladesh).
Transshipment and Bangladesh
- Bangladesh, with limited deep-sea port infrastructure, depends on transshipment via foreign ports (e.g., Singapore, Colombo) or neighboring countries (especially India).
- Key sectors, like the Readymade Garments (RMG) industry, rely on smooth transit for exports to Nepal, Bhutan, and Myanmar.
India’s Transshipment Facility to Bangladesh (Since 2020)
- India had allowed Bangladesh to use its ports and airports for exporting goods to Nepal, Bhutan, and Myanmar.
- Enhanced regional connectivity, improved logistics, and supported BBIN (Bangladesh-Bhutan-India-Nepal) integration.
Withdrawal of Facility (April 8, 2025):
- India terminated the facility citing significant congestion at its airports and ports.
- Caused logistical delays, higher costs, and backlogs, impacting India’s own exports.
Official Justification:
- MEA clarified the move was due to operational issues, not political motives.
- Exports from Bangladesh to Nepal and Bhutan through Indian territory will continue, but transshipment via Indian facilities will not.
Geopolitical Undercurrents:
- Withdrawal came days after Muhammad Yunus (Bangladesh’s interim govt. adviser) visited Beijing.
- Yunus advocated for enhanced China-Bangladesh trade and greater access for China through Bangladeshi ports to Northeast India.
- India did not confirm a direct link, but timing raises speculation of a strategic signal.
Economic Implications for Bangladesh:
- Readymade garments (RMG) sector, a major export from Bangladesh, may face disruption.
- Exports to landlocked neighbors now face logistical hurdles and increased costs without Indian port access.
Regional Trade Impact:
- May strain Bangladesh’s trade logistics, especially with Nepal, Bhutan, Myanmar.
- Could push Bangladesh to seek alternate routes or develop self-reliant port infrastructure.
- May indirectly boost Chinese influence if Bangladesh diversifies toward China-led corridors.
India’s Strategic Concerns:
- India appears protective of its logistical ecosystem, especially amid rising exports.
- Likely a calibrated balancing act — addressing internal congestion while signaling geopolitical caution regarding China’s growing regional footprint.
