India-Bangladesh Trade Ties: India and Bangladesh have shared strong trade relations for many years. Both countries trade essential daily goods. However, recent tensions in bilateral relations and the ongoing political crisis in Bangladesh could affect this trade. Any disruption in supplies from India may directly impact the daily lives of people in Bangladesh, from food to clothing.
Bangladesh depends heavily on Indian goods for food security, industry, healthcare, and energy. Experts warn that supply disruptions could lead to higher prices, shortages, and economic stress.
Key Indian Goods Bangladesh Depends On
Wheat: Bangladesh imports large quantities of wheat from India, making it a key part of its food security. Before India imposed export restrictions, wheat imports were worth about USD 734.54 million (Rs 6,575 crore), or nearly 2.1 million metric tons. After the ban, only 150,000 metric tons were exported under special exemptions linked to earlier contracts.
Rice: India exports several types of rice, including basmati, to Bangladesh. These supplies help meet local demand and maintain government food reserves.
Sugar: In 2021-22, Bangladesh imported sugar worth about USD 565.6 million (Rs 5,063 crore) from India. Sugar is essential for households and food-processing industries.
Onions, Potatoes, and Garlic: These everyday vegetables are largely imported from India. Any disruption in supply leads to sharp price rises in Bangladesh. Bangladesh also imports fresh fruits, vegetables, and processed food items from India
Spices and Other Grains: Trade in spices and grains reached about USD 434.8 million (Rs 3,891 crore) in 2021-22, supporting both domestic consumption and food industries.
Cotton: Around 35% of India’s cotton exports go to Bangladesh.
Industrial Goods: India supplies refined petroleum products, plastics, steel, and electrical equipment used in construction, manufacturing, and energy sectors.
Medicines and Medical Supplies: India is one of the main suppliers of medicines to Bangladesh’s healthcare system.
Why Bangladesh Depends on India
Bangladesh shares about 94% of its border with India, covering nearly 4,367 km. This geographic closeness makes India the cheapest and fastest source of supplies. Easy transport routes give Bangladesh a strong cost advantage compared to distant countries.
Trade and Economic Impact
Bilateral trade between India and Bangladesh reached USD 15.9 billion in FY 2022-23. Bangladesh exported goods worth about USD 2 billion to India. India’s exports to Bangladesh were USD 14 billion in 2021, USD 13.8 billion in 2022, and USD 11.3 billion in 2023. Global issues such as the Russia-Ukraine war also disrupted supply chains.
Over the past eight years, India has provided around USD 8 billion in development assistance to Bangladesh, mainly for roads, railways, and port projects. During the tenure of former Prime Minister Sheikh Hasina (2009-July 2024), Bangladesh’s GDP grew from USD 123 billion to USD 455 billion, while per capita income rose from USD 841 to USD 2,650.
Can Any Country Replace India?
China is a major investor in Bangladesh, with about USD 7 billion invested under the Belt and Road Initiative and exports worth USD 22 billion in 2023. However, experts say China cannot match India’s cost and distance advantages.
Current Situation
Amid rising tensions, India has closed its Visa Application Centers in Chittagong, Dhaka, and other locations until further notice. Security has also been increased at Indian diplomatic offices in Bangladesh. India has urged the Bangladeshi government to take action against those responsible for the murder of a Hindu youth.
In simple terms, Indian supplies are vital to Bangladesh’s economy. Any major disruption could raise inflation, increase unemployment, and slow economic growth.
