India has revoked a 2020 policy allowing Bangladesh to export goods to third countries via Indian territory, following remarks by Bangladesh’s interim leader, Muhammad Yunus, that suggested strategic alignment with China. Yunus described Bangladesh as a “guardian of the ocean” for India’s landlocked Northeast and hinted at the region integrating with China’s economy.

India viewed these comments, especially given their proximity to the sensitive Siliguri Corridor, as provocative. Bangladesh’s invitation to China to invest in an airbase near the corridor further heightened tensions.

The cancellation, effective immediately per CBIC’s April 8 notification, disrupts Bangladeshi trade to Bhutan, Nepal, and Myanmar, increasing export costs and delays. Trade experts, including GTRI, warn the move may violate WTO rules, particularly Article V of GATT 1994 and the Trade Facilitation Agreement, which protect transit rights for landlocked countries.

Political leaders in India’s Northeast have supported the decision, citing security concerns and the need for stronger regional infrastructure.