As tensions escalate in the global trade war between the United States and China, signs of a similar conflict are emerging in South Asia.
A few days after India revoked Bangladesh’s access to export goods to third countries through selected Indian customs points, Dhaka has responded by imposing import bans on various Indian products. It has also extended the ban to include two goods imported from Nepal and Bhutan.
According to Bangladeshi media, the National Board of Revenue (NBR) of Bangladesh issued a notification on Sunday banning the import of several items from India. These include yarn (thread), powdered milk, tobacco, newsprint, potatoes, fish, various types of paper and paperboard, radio and television parts, bicycle and vehicle parts, ceramic and sanitary ware, stainless steel, marble and tile slabs, duplex board, craft paper, and other products.
Government sources cited by Bangladeshi media say the ban is intended to protect domestic industries, especially in the textile, paper, and ceramic sectors. The move comes amid deteriorating relations between India and Bangladesh, with Dhaka strengthening ties with China and Pakistan after India reportedly granted asylum to former Bangladeshi Prime Minister Sheikh Hasina.
To avoid the appearance of targeting only India, Bangladesh has also banned the import of yarn and potatoes from Nepal and Bhutan. However, data from Nepal’s Department of Customs shows that Nepal exported no such goods to Bangladesh in the past three fiscal years. In the current fiscal year, only 50 kilograms of yarn worth Rs 18,000 were exported.
Ravi Shankar Sainju, former joint secretary at Nepal’s Ministry of Industry, Commerce and Supplies and an international trade expert, said the inclusion of Nepal and Bhutan in the ban appears symbolic. “The ban is clearly directed at India and can be seen as part of a trade war between the two countries,” he said.
Sainju believes Bangladesh’s move is a retaliation against India’s suspension of the transshipment facility that previously allowed Bangladeshi goods to be shipped to third countries via Indian ports, including dry ports. India had provided this facility until it was halted on April 8, 2020.
With the South Asian Association for Regional Cooperation (SAARC) inactive for over a decade, the sub-regional initiative involving Bangladesh, Bhutan, India, and Nepal (BBIN) had gained some momentum. However, the current tension between India and Bangladesh threatens to derail this partnership.
India was reportedly angered when Mohammad Yunus, chief advisor to Bangladesh’s interim government, invited Chinese investment by highlighting that India’s northeastern states are landlocked and depend on Bangladesh for access to the sea.
Relations between the two neighbors have further cooled after India granted asylum to Hasina. In January, reports emerged that Pakistan’s Inter-Services Intelligence (ISI) had also visited Bangladesh. Once considered pro-India, Hasina's government was ousted following mass protests, and an interim administration led by Yunus is now in place in Dhaka.
