India DGFT Notification No. 07/2025-26 — Port Restrictions on Imports from Bangladesh

Mechanism

Under the Foreign Trade (Development and Regulation) Act 1992, the DGFT holds authority to restrict import entry points via notification. Notification No. 07/2025-26 dated 17 May 2025 exercises that power to create a two-tier channel restriction on Bangladesh imports:

Tier 1 — RMG (all kinds): Barred from every land port. Permitted only via Nhava Sheva (Jawaharlal Nehru Port, Maharashtra) and Kolkata seaport. This effectively adds a substantial logistics cost and dwell-time burden relative to the land-port route that Bangladeshi RMG exporters had previously used for smaller-consignment trade.

Tier 2 — Other listed goods (processed food, carbonated drinks, cotton waste, plastic goods, wooden furniture): Barred from LCSs and ICPs in four northeastern states — Assam, Meghalaya, Tripura, Mizoram — and at Changrabandha and Fulbari in West Bengal. Trade may still enter via Petrapole/Benapole (the main land-border crossing), Kolkata seaport, and northeastern ICPs not on the restricted list, though Changrabandha/Fulbari closures cut two of the more active West-Bengal land routes.

Context: bilateral trigger chain

The notification is the second move in a two-step bilateral restriction sequence:

1. 13 April 2025 — Bangladesh NBR yarn-import ban via land ports: The National Board of Revenue (NBR), acting on a Bangladesh Textile Mills Association (BTMA) petition and a Bangladesh Trade and Tariff Commission (BTTC) recommendation, blocked yarn imports through five major India-Bangladesh land ports (Benapole, Bhomra, Banglabandha, Burimari, Sonamasjid). The stated rationale was undervaluation of yarn at land-port customs relative to Chattogram seaport pricing; the structural effect was protection of domestic spinning mills at the expense of export-oriented RMG and knitwear manufacturers (BGMEA/BKMEA).

2. 17 May 2025 — India DGFT 07/2025-26 (this action): India's response targets the Bangladesh export sectors most sensitive to logistics cost — RMG (Bangladesh's dominant export, >80% of merchandise exports) and secondary consumer-goods categories. By channelling RMG to seaports only, India imposes time and cost friction on trade that previously moved via land for shorter-transit routes to northeastern India.

LDC-graduation timing

The bilateral restriction lands at a structurally sensitive moment. Bangladesh is scheduled to formally graduate from Least Developed Country (LDC) status on 24 November 2026. Post-graduation, Bangladesh loses preferential tariff access in major export markets and will need bilateral or regional FTAs to maintain market position. Compounding friction in the India trade corridor — Bangladesh's largest single-country trading partner — adds negotiating complexity to the graduation transition.

Downstream implications

• Bangladesh RMG exporters lose access to cheaper/faster land-port routes for northeastern India

consignments; cost pressure on thin-margin commodity knitwear lines.

• Indian spinning-mill sector (domestic) benefits indirectly if cheaper Bangladeshi yarn supply

chain is disrupted for Bangladeshi competitors.

• Logistics rerouting toward Kolkata seaport increases Chittagong Port / Kolkata Port traffic;

potential for congestion during peak RMG export seasons.

• The restriction pattern mirrors the 2019 India-Pakistan post-Pulwama template: use of DGFT

port-routing authority as a trade-friction instrument short of outright ban.

• SAARC intra-regional trade framework remains dormant; this episode reinforces the pattern.

Open questions

• Whether Bangladesh will escalate (e.g., import restrictions on Indian goods at Benapole, or

tariff measures targeting Indian exports to BD).

• Whether the NBR yarn-port ban will be rolled back under BGMEA/BKMEA pressure, and whether

that would trigger rollback of DGFT 07/2025-26.

• Timeline for LDC-graduation trade-arrangement negotiations between IN and BD to absorb this

friction.

• Whether India will extend the RMG port-routing restriction to Petrapole/Benapole (currently

not restricted under Tier 2).