India approves key sea-air route for Bangladeshi exports

Infographic: TBS

India has decided to open the Delhi Air Cargo complex for Bangladeshi transit cargo, in an apparent reciprocal move, aiming to advance its regional trade hub goals. The move comes after Bangladesh has already allowed its neighbour to use the Chattogram and Mongla ports for transporting goods through Bangladesh territory.

The Indian government, on its own, approved Bangladesh's transhipment cargo to be handled at the air cargo complex from 15 February, according to India's Central Board of Excise and Customs (CBEC).

Bangladeshi exporters had been using the Kolkata air cargo complex since June 2020, but fewer flight connections there limited their ability to take advantage of the alternative trade corridor, reports The Loadstar.

Delhi Airport has expansive international flight connections and greater market reach, with chartered freighter capacity growing, thanks to an influx of cargo-only start-ups and global express logistics leaders like UPS and DHL beefing up their Indian services, adds the report.

Meanwhile, Bangladesh has set its own ambition to be a regional trans-shipment hub, as part of which it has already opened its sea-land ports for neighbouring countries.

Indian vessels, since last year, have been using Chattogram and Mongla ports under the transit agreement signed between the two countries. The move came more than three years after the two sides inked a deal in October 2018 for using the ports for movement of goods to and from India via Bangladesh territory.

Last December, the Bangladesh government also allowed the import of man-made yarn and fabric through Benapole and two other new land ports – Bhomra in Satkhira and Sonamasjid in Chapainawabganj.

Speaking to The Business Standard, business leaders said there are more opportunities in Bangladesh for Indian traders and exporters to use Bangladesh's sea and air ports to reduce their shipping time.

They mentioned that Indian sea-air routes for Bangladeshi exporters are not needed at this time. To use those air routes, much improvement at the land ports of both the countries is needed first.  

"Currently, no exporters are using Indian airports as it will also increase cost and lead time," said BGMEA Vice President Shahidullah Azim.

"Apparel exporters had to use the Kolkata airport during Covid, when Dhaka airport's scanners were not functioning, to meet buyers' requirements," he said.  

He pointed out that it takes 18 days to import goods from China while it takes 30 days for goods to arrive from neighbouring India.

"On a recent visit, we (BGMEA) also requested India's top government officials to improve infrastructure at their land ports to facilitate smooth trade with Bangladesh," the BGMEA vice president said, adding that the Bangladesh government, meanwhile, has allowed yarn import through five new land ports.

BKMEA Executive President Mohammad Hatem said shipping on sea routes is rather easier as the process takes more than a month through Indian land ports.

Syed Ershad Ahmed, managing director, Expeditors (Bangladesh) Ltd, said, "In fact, we now have the position to offer neighbouring countries the use of our ports."

He mentioned that 30% capacity of Chattogram port still remains unutilised and with increased efficiency of the customs the port's capacity can further increase.

"Mongla port, on the other hand, is also ready to offer similar services to neighbouring countries with the Padma Bridge opening up a new horizon in connectivity," he added.

Syed Ershad Ahmed also mentioned that the Chattogram Bay terminal and Matarbari Deep Sea Port will help Bangladesh realise its ambition to be a transhipment hub, which will boost regional connectivity even more.

"The Chattogram Bay terminal should be prioritised and construction should begin as soon as possible, he said.

The Loadstar report said that the alternative transhipment facilitation push, both for sea and air services, comes as the Bangladesh government and local exporters are looking to capitalise on global sourcing shifts away from China, with RMG goods leading that migration.