India cancels transhipment facility for Bangladesh
With the new circular, the transhipment arrangement has been terminated with immediate effect. However, cargo that has already entered Indian territory under the earlier system will be allowed to exit as per existing procedures
India has terminated the transhipment facility that allowed Bangladesh to export cargo to third countries through its land borders.
The Central Board of Indirect Taxes and Customs (CBIC) issued a circular yesterday (8 April) regarding the withdrawal of the facility.
"It has been decided to rescind... circular...dated June 29, 2020, as amended with immediate effect. Cargo already entered into India may be allowed to exit the Indian territory as per the procedure given in that circular," reads the CBIC circular.
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The previous circular had allowed transhipment of export cargo from Bangladesh to third countries using Indian Land Customs Stations (LCSs) en route to Indian ports and airports.
Indian think tank Global Trade Research Initiative (GTRI) said with the new circular, the transhipment arrangement has been terminated with immediate effect.
However, cargo that has already entered Indian territory under the earlier system will be allowed to exit as per existing procedures, according to the circular.
According to Indian Express, the move followed Bangladesh's advocacy for extending the Chinese economy into the strategically important Northeast India region.
During his recent China visit, Chief Adviser Muhammad Yunus urged China to establish an economic base Bangladesh and insisted that Bangladesh was the "only guardians of the ocean" for the region.
"The seven states of India…eastern part of India — are called the Seven Sisters. They are a landlocked region of India. They have no way to reach out to the ocean. We are the only guardians of the ocean for this region. So this opens up a huge possibility. So this could be an extension of the Chinese economy…" Yunus said, inviting Chinese investors to Bangladesh.
A number of Indian leaders and scholars including Assam Chief Minister Himanta Biswa Sarma reacted to the chief adviser's comment.
They labeled the statement as "offensive, strongly condemnable and provocative."
"Bangladesh's plans to establish a strategic base near the Chicken's Neck area with China's assistance may have prompted this action. Bangladesh has invited Chinese investment to revitalise the airbase at Lalmonirhat, near India's Siliguri Corridor," Indian Express quoted Ajay Srivastava, former trade officer and head of GTRI.
