Fearing Pakistan-Like Fallout, Bangladesh Steps Back in Trade Clash with India

Alarmed by Pakistan’s economic collapse, Bangladesh has backed down from escalating its trade dispute with India, making it clear it will not retaliate and instead wants to resolve the issue through dialogue. Dhaka’s move signals a pragmatic shift aimed at avoiding the kind of crisis currently engulfing Islamabad.

“We Will Not Take Retaliatory Action” – Bangladesh Commerce Secretary

Following a high-level meeting in Dhaka, Commerce Secretary Mahbubur Rahman stated, “Our effort is to ensure that the situation does not worsen. We will not resort to any retaliatory action.” The meeting included representatives from ministries, trade bodies, and customs authorities to discuss the spiraling trade tension with India.

What Triggered the Dispute?

The tension began on April 13, when Bangladesh imposed a ban on yarn imports from India via four land borders. In response:

• India revoked transshipment facilities for Bangladeshi readymade garments.
• On May 17, India further banned imports of clothes, processed food, furniture, and other items from Bangladesh through land routes.

India is Bangladesh’s second-largest trading partner after China, making this escalation a serious concern for Dhaka.

“Sit Down and Talk” – Dhaka Sends Message to New Delhi

Rahman confirmed that Bangladesh has formally requested a Commerce Secretary-level meeting with India to defuse tensions. “We’re saying—sit down, talk, and find a solution,” he emphasized.

A business leader present at the meeting urged the government to seek a 3-month grace period to allow already-imported Indian goods—worth 3.5 lakh tonnes—to enter Bangladesh through land routes, citing high costs of sea freight as an obstacle.

Why Bangladesh Can’t Afford a Trade War

The data tells a clear story:

• Total bilateral trade (FY 2023–24): $10.56 billion
• Bangladesh exports to India: $1.56 billion
• Imports from India: $9 billion

Bangladesh heavily depends on India for raw materials, machinery, chemicals, food items, textiles, and agricultural goods. Additionally, under the SAFTA agreement, Bangladesh enjoys zero-duty access to Indian markets.

Why Bangladesh Is Backing Off – Lessons from Pakistan

Bangladesh’s retreat is being seen by experts as a lesson learned from Pakistan’s economic collapse—a country battling crippling inflation, diplomatic isolation, and dwindling foreign reserves. With the global economy still shaky, Dhaka appears unwilling to risk a full-blown trade standoff with a key regional partner.

If talks are accepted by India, the trade standoff could be resolved quickly. If not, both sides—especially businesses and common consumers—stand to lose.