India restricts entry of Bangladesh's readymade garments, several other items through land routes
Laying down new rules for trade with Bangladesh, India on Saturday decided to stop the import of certain items through the land routes used by Dhaka to send goods to the North-Eastern states. Also, New Delhi will not allow the $700-million import of ready-made garments from the neighbouring country through any of the 11 existing land trade routes.
Garments will be allowed only through the designated ports of Nhava Sheva, Mumbai, and Kolkata. Once India withdraws the facility of import via the land route, which is the swiftest and the cheapest mode, the garments being manufactured in hubs like Ludhiana and Tirupur will become more competitive.
The Directorate General of Foreign Trade (DGFT), under the Commerce Ministry, issued a notification on Saturday laying down the new rules.
The government's action comes after Indian yarn exports were last month not allowed to use land ports by Bangladesh, and rice exports were also not allowed through the Hili and Benapole Integrated Check Posts, adding to the existing restrictions.
Sources said the import of plastics, melamine, juice, furniture, bakery items, confectionery, fruit-flavoured carbonated drinks and cotton yarn would not be allowed through the land routes between Bangladesh and the states of Assam, Meghalaya and Tripura. Similarly, imports would not be allowed via the land routes through Changrabandha and Fulbari in north Bengal.
This means the listed goods will have to be exported by Bangladesh through the land routes with West Bengal — all those which are South of the Siliguri corridor.
"Among the many reasons, India took the decision as Bangladesh was able to export products to the North-East but when we wanted to export from the N-E, they did not allow it,” the sources said.
The transit of goods through Bangladesh was costing Indian merchants more than transporting through the circuitous route skirting around Bangladesh. Dhaka charges about 1.8 taka (almost an Indian rupee) per tonne, for every kilometre besides the administrative charges.
India had permitted the export of Bangladeshi goods via all land routes and through seaports without undue restrictions. However, Bangladesh continues to impose restrictions on Indian exports, particularly on the routes bordering the N-E states.
The sources said industrial growth in the N-E suffers a triple jeopardy due to the imposition of unreasonably high and economically unviable transit charges by Bangladesh, practically denying the North-Eastern states access to the mainland for manufactured goods and raw material. This was happening notwithstanding bilateral transit agreements.
Bangladesh allows only locally manufactured goods, restricting the market access to primary agricultural goods only. On the other hand, Dhaka has the free access to the entire north-eastern market, creating an unhealthy dependency and stymieing the growth of the manufacturing sector in the area.
