West Asia war may force India to look at enhancing trade with South Asian neighbours

The West Asia war that is likely to disrupt India's exports to the region may force New Delhi to look at ways to step up exports to South Asia.

The Indian Commerce and Industry ministry is reviewing issues related to tariff, non-tariff, logistics, regulatory and quality certification hampering business with Bangladesh, Nepal, Bhutan, Sri Lanka, Maldives and Afghanistan so as to iron out any challenges, The Economic Times reported today citing an official.

India's goods exports to these six countries increased 4.5% year-on-year to $25.5 billion in FY25.

"We are reviewing the export performance in this region and have asked industry for the challenges they face," said the official.

India's goods exports to West Asia fell 0.81% year-on-year to $36.61 billion in February and challenges are likely to continue in March.

Bangladesh is India's top export destination in South Asia, with outbound shipments of $11.48 billion last year, followed by Nepal ($7.38 billion) and Sri Lanka ($4.55 billion).

"There are challenges related to payments with Nepal while with Bangladesh, there are port restrictions that hinder trade," an industry representative said.

Payments issues and specific trade promotion and other support needed to increase exports to India's South Asian neighbors are likely to be taken up at a review meeting planned between the Commerce Ministry and industry representatives later this week, the newspaper said citing people familiar with the matter.

India has barred imports of certain jute products like fabrics, twine, ropes and bags from Bangladesh through land routes except Nhava Sheva seaport in Maharashtra. The move is aimed at quality control or protection of domestic industry.

Banned products include bleached and unbleached woven fabrics of jute or of other textile bast fibre; twine, cordage, rope of jute and sacks and bags of jute.