India-Bangladesh Trade in Turmoil: Unrest in Bangladesh Causes Major Trade Disruptions and Fallout

2 months ago

Bangladesh, India’s 25th largest trading partner, is facing a trade crisis with recent data showing a 9.5% drop in Indian exports, totaling $11 billion in FY24. The country’s political unrest and severe dollar shortage are impacting trade, leading to a decrease in imports from Bangladesh and higher risks for investors. Economic challenges, including inflation and reduced domestic demand, are affecting both local and imported products. Additionally, Indian Railways has suspended key train services to Bangladesh amid growing regional instability. Watch for detailed insights into how these issues are reshaping the India-Bangladesh trade relationship.

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Transcript

00:30Bangladesh is currently India's 25th largest trading partner with bilateral trade valued

00:37at $12.9 billion.

00:40This trade relationship is heavily skewed towards exports, making Bangladesh India's

00:478th largest export partner.

00:50However, recent data shows a decline in this trend.

00:55In FY24, India's export to Bangladesh dropped by 9.5%, totaling $11 billion.

01:06Bangladesh remains a significant market for Indian auto exports, similar to countries

01:12in Africa and Latin America.

01:14Yet, the ongoing political unrest in Bangladesh poses a serious risk for investors.

01:22This instability not only threatens existing projects but could also lead to an increase

01:30in illegal migration into India.

01:33Arpita Mukherjee, a professor at the Indian Council for Research on International Economic

01:38Relations, highlights that this unrest is creating substantial uncertainty for exporters

01:46and raising risks for investors.

01:50Domestic challenges in Bangladesh have also impacted bilateral trade adversely.

01:56The country is experiencing a severe dollar shortage, which has constrained its ability

02:03to import goods, including those from India.

02:07Rising inflation within Bangladesh has further decreased domestic demand, leading to reduced

02:14consumption of both local and imported products.

02:19Consequently, India's imports from Bangladesh fell by 8.7%, amounting to $1.8 billion in

02:282023-24.

02:31Key imports from Bangladesh include iron and steel products, textiles and leather goods.

02:38In a related development, Indian railways had suspended several train services to Bangladesh.

02:45The Kolkata-Dhaka-Kolkata-Mathre Express, Kolkata-Dhaka-Koa-Mathre Express and Kolkata-Khulna-Bandhan Express have all been cancelled,

02:56reflecting the growing impact of the regional instability on transportation and trade.

India-Bangladesh Trade in Turmoil: Unrest in Bangladesh Causes Major Trade Disruptions and Fallout

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