India Cracks Down on Bangladeshi Jute Imports: Major Trade Blow Explained

India has sharply escalated its trade restrictions on Bangladesh by tightening controls on the import of jute and its derivatives. In a move aimed at enforcing stricter entry routes, the Directorate General of Foreign Trade (DGFT) has announced that these imports will now be permitted only through Mumbai’s Nhava Sheva seaport, effectively banning their entry through any land port along the India-Bangladesh border.

The newly restricted items include raw or retted jute, flax tow and waste, jute yarns (single or multiple folded), and woven fabrics of jute or flax. The DGFT notification, dated June 27, also clarified that while these goods may still transit India en route to Nepal and Bhutan, they cannot be re-exported from those countries back to India.

This decision comes just weeks after India imposed similar land-port restrictions on Bangladeshi ready-made garments, plastics, melamine, furniture, processed foods, and beverages. That earlier move forced Bangladeshi exporters to reroute shipments through Kolkata or Nhava Sheva, dramatically increasing logistics costs and transit times.

The trade spat gained momentum following controversial remarks made in China by Bangladesh’s Chief Adviser Muhammad Yunus, who described India’s northeast as a “landlocked region with no access to the ocean.” Indian officials viewed these comments as undermining the country’s regional connectivity strategy and took strong diplomatic exception.

Government sources say these restrictions are part of India’s push for “reciprocal terms” in trade relations. While India had historically provided relatively unfettered market access to Bangladeshi goods, Bangladesh maintained or imposed selective restrictions on Indian exports, including yarn and rice, and enhanced inspection regimes.

The new jute import restrictions will deal a heavy blow to Bangladesh’s jute industry, which depends significantly on the Indian market. By funnelling trade through just one seaport, India is set to raise costs for Bangladeshi exporters and tighten regulatory oversight.

Trade watchers see this as a clear signal that India intends to rebalance bilateral trade relations and end what it views as one-sided advantages long enjoyed by Bangladeshi exporters. As diplomatic tensions simmer, the future of cross-border trade remains clouded with uncertainty.

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