GTRI's Ajay Srivastava on Modi Govt's Calculated Trade Strike Against Bangladesh After Dhaka's Curbs

India has taken a calibrated yet impactful trade step against Bangladesh, restricting several key imports — including garments, processed food, and plastic products — to designated sea ports, effectively cutting off access through land routes. This move, valued at nearly $770 million or 42% of India’s total imports from Bangladesh, follows what India sees as unprovoked trade curbs and a diplomatic pivot towards China by Dhaka. Ajay Srivastava, Founder of Global Trade Research Initiative (GTRI), explains that while India hasn’t imposed a blanket ban, it has responded to Bangladesh’s growing restrictions — such as the April 2025 ban on Indian yarn and a new transit fee on Indian cargo — with a deliberate, measured strategy. The May 17 directive from India’s Commerce Ministry is a response not just to trade imbalances but also to geopolitical signals, including recent provocative remarks by Bangladesh’s interim leader Muhammad Yunus during his visit to China. India has also revoked a key transshipment facility granted to Bangladesh in 2020. Srivastava notes that while Bangladesh has now graduated from LDC status and risks losing key tariff advantages, India has so far chosen a restrained path, signaling room for diplomacy but not ruling out tougher measures ahead.