India, Bangladesh flag trade barriers in first talks after prolonged gap

India raised barriers to exports, including high import duties on commodities such as fruits, rice and iron and the use of positive lists for trade with the northeastern states, during trade talks with Bangladesh last week, people familiar with the matter said.

Bangladesh called for removal of restrictions on its exports through Indian land ports and withdrawal of anti-dumping duties on jute products and PET film during the meeting of the joint working group on trade held in New Delhi during October 8-9, the people said on condition of anonymity.

This was the first meeting of a bilateral joint working group after a prolonged gap as the two sides work on normalising bilateral relations, which had witnessed a downslide under the interim administration led by Muhammad Yunus. The two sides are also working to arrange meetings of other working groups on issues such as consular matters.

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The people described the trade talks as positive and said the deliberations will help prepare for a planned meeting of the commerce secretaries of the two sides. During the talks, the Indian side raised the restrictions imposed by Bangladesh’s interim government on Indian cotton exports, the high import duties on Indian commodities such as fruits, rice, iron and steel, and Dhaka’s use of positive lists for trade through land border posts in the northeastern states, they said.

While Bangladesh’s trade with states such as West Bengal is done on the basis of a negative list, or a small list of items whose export isn’t allowed, trade with the northeastern states is done on the basis of a positive list, or a list specifying limited items whose exports are permitted. The Indian list has for long sought the adoption of a negative list for the northeastern states to provide a level playing field, the people said.

The Indian side also sought the revival of border ‘hats’ or markets and integrated check posts and land customs posts that were shut during the term of the interim government, they said.

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The meeting focused specifically on trade barriers, land port infrastructure and connectivity. The Bangladesh side sought a review of restrictions on its goods entering India through land ports, including the withdrawal of anti-dumping duties on jute products and polyethylene terephthalate (PET) film, and the harmonisation of product standards and simplification of certification procedures under the Bureau of Indian Standards (BIS).

The Bangladesh side also sought the retention of existing tariff preferences for its products following the country’s graduation from the least developed country (LDC) status.

The discussions focused on regional freight movement, with Bangladesh seeking greater access for its trucks going to Nepal and Bhutan through Indian territory. It also called for better infrastructure at Indian land customs posts, including access roads, warehouses, and quarantine facilities, and increased land port capacity and faster cargo clearance. These measures will help reduce delays and the cost of transportation, the people said.

Two-way trade was worth $12.36 billion in FY26, with India’s exports accounting for $10.58 billion. The people said the Bangladesh side is unlikely to take steps to ease restrictions for Indian exports in view of the current deficit in trade.