India, which has historically enjoyed strong trade relations with Bangladesh is now staring at potential disruption to trade following the unrest in Bangladesh and subsequent widespread violence & political instability. India’s trade with Bangladesh increased significantly after 2010 and continues to grow. Here is a review of the numbers.
As of August 2024, Bangladesh is grappling with severe political instability following Prime Minister Sheikh Hasina’s resignation and her flight to India amidst widespread protests and riots. The unrest began over the reinstatement of a controversial quota system for civil service positions by the High Court, which had been abolished in 2018. Hasina’s alleged inflammatory remarks and the subsequent violent crackdown on protesters further exacerbated the situation.
In response to the chaos, the military assumed interim control in the country, and Nobel laureate Muhammad Yunus was appointed the caretaker government head. Protests and riots continue across the country, with significant violence and a high death toll.
Political turmoil in Bangladesh has raised economic concerns in India
India, which has historically enjoyed strong trade relations with Bangladesh, is closely monitoring the situation. India is also engaged in diplomatic efforts to support stability and address potential disruptions in trade relations. Bangladesh stands as India’s largest trading partner in South Asia, and India is one of Bangladesh’s major trade partners in Asia. Amidst the ongoing political turmoil in the country, there are concerns about potential disruptions to bilateral trade between the two neighbouring countries, impacting sectors such as textiles and agriculture, especially as the harvest of Kharif crops is around the corner. In this backdrop, we look at the trends in India’s trade with Bangladesh in recent years.
The data used in this story has been sourced from Dataful. The datasets used are country-wise exports and imports and commodity-wise exports and imports with Bangladesh. As with our earlier stories, we have considered the fiscal year to analyse the overall trade between the two countries. However, the commodity-wise data is available in calendar year format and has been considered as it is.
India-Bangladesh trade is characterized by sustained trade surplus
India’s trade relationship with Bangladesh has generally been characterized by a strong export performance leading to a sustained trade surplus. The trade deficit has generally widened over time, particularly from 2017-18 to 2021-22, where the gap between exports and imports increased significantly. In 2022-23 and 2023-24, the trade deficit narrowed slightly as both exports and imports decreased, but imports decreased at a slower rate than exports.
India’s exports to Bangladesh grew by 5 times between 2007-08 & 2021-22
India’s exports to Bangladesh show a general upward trend from 2007-08 to 2018-19, with some fluctuations. Exports increased from 2.76 billion USD in 2007-08 to a peak of 16.15 billion USD in 2021-22, marking a growth of about 5 times. However, after peaking in 2021-22, there is a noticeable decline in exports in the following two years, with exports reducing to 11.07 billion USD in 2023-24, down by nearly 42% compared to the peak in 2021-22. One reason could be the restrictions imposed by India on exports of rice, wheat, and sugar as part of measures to control rising domestic prices.
Meanwhile, imports from Bangladesh to India were valued at 219.07 million USD in 2007-08 and remained relatively low until 2011-12. From 2012-13 onwards, imports show a gradual upward trend. The value of imports crossed 1 billion USD for the first time in 2018-19. It crossed 2 billion USD in 2022-23. Nonetheless, similar to exports, imports also declined slightly in 2023-24 to 1.84 billion USD.
In 2024-25, the value of exports from India to Bangladesh was 1.78 billion USD for the first two months of April & May 2024 while the imports were 0.29 billion USD or 290.9 million USD during the same period. During the same period in 2023-24, the exports were 1.72 billion USD and imports were 0.28 billion USD (277.5 million USD).
Trade with Bangladesh involves Diverse range of products
India exports a diverse range of products to Bangladesh, including cotton yarn, petroleum products, oils, spices, and auto components. On the other hand, India imports essential commodities from Bangladesh, such as ready-made garments made of cotton, aircraft and spacecraft parts, jute, leather footwear, and marine products.
The trend in the value of imports of the top 15 products from Bangladesh has been analysed below. For convenience, generic titles have been used in the chart. The entire description of the products has been listed in the succeeding table.
| Name used in Chart | Actual Description |
| Woven Apparel | Articles of Apparel and Clothing Accessories, Not Knitted or Crocheted. |
| Vegetable Fibres and Paper Yarn | Other Vegetable Textile Fibres; Paper Yarn and Woven Fabrics of Paper Yarn. |
| Textile Products & Rags | Other Made Up Textile Articles; Sets; Worn Clothing and Worn Textile Articles; Rags |
| Knit and Crochet Apparel | Articles of Apparel and Clothing Accessories, Knitted or Crocheted. |
| Fats, Oils, and Waxes | Animal or Vegetable Fats and Oils and Their Cleavage Products; Pre. Edible Fats; Animal or Vegetable Waxex. |
| Fish and Marine Invertebrates | Fish And Crustaceans, Molluscs and Other Aquatic Invertebrates. |
| Chemical Compounds and Isotopes | Inorganic Chemicals; Organic or Inorganic Compounds of Precious Metals, of Rare-Earth Metals, or Radi. Elem. or of Isotopes. |
| Minerals and Cement | Salt; Sulphur; Earths and Stone; Plastering Materials, Lime and Cement. |
| Fruits and Nuts | Edible Fruit and Nuts; Peel or Citrus Fruit or Melons. |
| Leather Goods and Accessories | Articles of Leather, Saddlery and Harness; Travel Goods, Handbags and Similar Cont. Articles of Animal Gut (Other Than Silk-Worm) Gut. |
| Footwear and Parts | Footwear, Gaiters and The Like; Parts of Such Articles. |
India’s import of different types of apparel from Bangladesh has increased
The imports from Bangladesh to India have shown substantial growth across apparel, textiles, and specialized goods such as aircraft parts and fats/oils. Woven apparel imports increased from 2.3 million USD in 2007 to 419.8 million USD in 2023. A similar significant growth was witnessed in the imports of textile products and rags and knit & crochet apparel. Imports of leather goods and accessories, and footwear and paths also recorded a steady rise over the years.
Imports of aircraft and spacecraft, and parts were non-existent in the early years but have been emerging significantly in 2019 (39.53 million USD) and in 2023 (172.21 million USD). Iron and Steel imports and that of fats, oils, and waxes peaked in 2021 & 2022. Imports of Fruit and Nuts saw erratic trends with noticeable highs in 2015 (43.76 million USD) and significant drop-offs after 2017. Overall growth was also recorded in imports of Vegetable Fibres and Paper Yarn.
Similar to the analysis of imports, the top 15 commodities exported to Bangladesh in terms of value have been considered here. The generic titles used, and the actual commodity names are given in the table below.
| Name used in Chart | Actual Description |
| Certain Petroleum Products | Mineral Fuels, Mineral Oils and Products of Their Distillation; Bituminous Substances; Mineral Waxes. |
| Automobiles and Parts | Vehicles Other Than Railway or Tramway Rolling Stock, and Parts and Accessories Thereof. |
| Reactors and boilers | Nuclear Reactors, Boilers, Machinery and Mechanical Appliances; Parts Thereof. |
| Minerals and Cement | Salt; Sulphur; Earths and Stone; Plastering Materials, Lime and Cement. |
| Pigments and Coatings | Tanning or Dyeing Extracts; Tannins and Their Deri. Dyes, Pigments and Other Colouring Matter; Paints and Ver; Putty and Other Mastics; Inks. |
Cotton Exports Increased Significantly
Exports of cotton from India to Bangladesh increased substantially from 412.1 million USD to 3734.97 million USD between 2007 and 2021. However, in 2022 and 2023, the exports of the commodity have declined by over 40%. Exports of certain petroleum products increased by over 17 times in the fifteen years between 2007 and 2023. Even during the pandemic years, the exports were only marginally affected unlike other commodities like automobiles and parts, and reactors and boilers.
On the other hand, Plastics, Organic Chemicals, Pigments and Coatings, and Electrical Machinery exports have shown consistent growth until 2021 and 2022. Iron and Steel, Edible Vegetables, and Sugar and Sugar confectioneries have experienced more significant fluctuations over the years.
Both the countries’ economies will be significantly impacted by any disruption in trade
To sum up, the trade relationship between India and Bangladesh has undergone significant changes, marked by both growth and fluctuations. Over the years, India’s exports to Bangladesh increased substantially, especially in sectors like cotton and petroleum products. However, in recent years, some of these exports have seen a decline. Conversely, Bangladesh’s exports to India have shown robust growth, particularly in apparel, textiles, and specialized goods like aircraft parts.
As India’s exports to Bangladesh surged, particularly in key sectors like cotton and petroleum products, it reflects Bangladesh’s reliance on India for essential raw materials and energy resources to fuel its industries, especially its textile and manufacturing sectors. Similarly, the significant growth in imports from Bangladesh, particularly in textiles, apparel, and specialized goods, highlights India’s increasing reliance on Bangladesh for these products. Thus, any disruptions in the trade will significantly impact both economies.
