Bangladesh is the 25th largest trading partner for India, with the size of the bilateral trade at $12.9 billion. The trade is dominated by exports, with Bangladesh being India’s eighth largest export partner. In FY24, India’s exports to Bangladesh contracted 9.5 per cent to $11 billion.
Bangladesh is also a key destination for Indian auto exports, alongside African and Latin American countries. The political unrest in the neighbouring country could also pose risk for investors for their existing projects and may lead to an influx of illegal migrants into India. “The political unrest in Bangladesh will create uncertainty for exporters. In fact, there will be greater risk for investors,” said Arpita Mukherjee, professor, Indian Council for Research on International Economic Relations (ICRIER).
Bangladesh’s economic challenges have negatively impacted bilateral trade in recent years. Bangladesh has been facing a severe dollar shortage, which has limited its ability to import goods, including those from India. The rising inflation in the country has also reduced domestic demand, leading to lower consumption of both local and imported products,” GTRI said. India’s imports from Bangladesh contracted 8.7 per cent to $1.8 billion in 2023-24. Top inbound shipments include iron and steel products, textiles and leather goods, among others. On a separate note, Indian Railways has also suspended services to Bangladesh. Kolkata-Dhaka-Kolkata Maitri Express, Kolkata-Dhaka-Koaa Maitri Express and Kolkata-Khulna and Bandhan express stand cancelled.
