Dhaka/New Delhi: A tit-for-tat trade dispute has erupted between India and Bangladesh, casting a shadow over their typically close economic ties. The spat began with India’s abrupt suspension of a crucial transit facility enjoyed by Bangladesh, sparking a swift retaliatory measure from Dhaka.
The transit arrangement, which allowed Bangladesh to ship its goods to international markets via Indian ports and airports, was halted by New Delhi on Tuesday. Indian authorities attributed the decision to “congestion and heavy load” at their transit hubs. However, the move has been met with skepticism in Bangladesh, where it’s seen as a potentially punitive measure.
In a rapid response, Bangladesh announced a ban on the import of cotton yarn from India through land routes. Officials in Dhaka stated this was a necessary step to safeguard their burgeoning local textile industry from what they perceive as an unfair trade practice or potential vulnerability.
The escalating trade tensions come amidst a backdrop of diplomatic maneuvering in the region. Notably, Pakistan and Bangladesh have reiterated their commitment to bolstering bilateral relations, with recent high-level contact between Pakistani Deputy Prime Minister Ishaq Dar and Bangladeshi Foreign Affairs Adviser Touhid Hossain.
Dar reportedly discussed “escalating regional tensions resulting from India’s unfounded allegations” with Hossain, who expressed concern and called for de-escalation.
The confluence of these events suggests a potentially shifting dynamic in South Asia, with trade disputes adding another layer of complexity to regional relationships.
The economic impact of these restrictions on both India and Bangladesh, particularly on Bangladesh’s export sector and India’s cotton yarn industry, remains to be seen. Businesses in both countries are now facing uncertainty as they navigate the sudden imposition of these trade barriers.
