India Closes Down Transshipment Hub for Bangladesh Exports: Diplomatic Rift Intensifies with Insulting Remarks from Yunus

Poonam Sharma

In a dramatic and surprising turn of events, India has closed down the transshipment hub that enabled Bangladesh to ship goods to third-party nations such as Bhutan, Nepal, and Myanmar. The move, which was made in direct reaction to comments made by Bangladesh’s Chief Adviser, Professor Muhammad Yunus, has caused shockwaves in the diplomatic circles of South Asia. It marks a radical change in the relationship between two neighboring countries, hitherto connected by trade, culture, and history.

The controversial statement by Professor Yunus, issued during his tour of China towards the end of March 2025, have caused serious worry in New Delhi. Yunus, who enjoys widespread popularity as a leading figure in Bangladesh, referred to the country as the “only guardian of the ocean” for Northeast India, leaving the impression that Bangladesh had some leverage over entry into the region, which is strategically crucial. To Indians, Yunus’s statement was not only a daring assertion but also a subtle claim of geopolitical hegemony, an effort to indicate Bangladesh’s capacity to dictate access to the crucial northeastern Indian states, a region of great economic and military significance.

While Yunus could have been attempting to bolster the regional prestige of Bangladesh, his remarks were provoking and politicized and at risk of putting India’s security and trade patterns at risk. This was the proverbial last straw in a mounting set of diplomatic gaffes on the part of the government of Bangladesh, whose mounting hostility toward India has produced an estrangement whose effects on regional stability might persist for decades to come.

The souring of Indo-Bangladeshi ties is not the sole consequence of Yunus’s recent remarks. Recent years have witnessed an alarming increase in anti-Hindu rhetoric in Bangladesh fueled by both institutional apathy and raw hostility from sections of the ruling elite. There have been countless reports on the persecution of Bangladesh’s Hindu minority community, which has traditionally been an integral part of the country’s cultural heritage.

The government of Bangladesh, led by the Awami League, has often been accused of turning a blind eye to the violence and discrimination faced by Hindus. Hindu temples and homes have been attacked, and the community has been subjected to harassment, forced conversions, and, at times, even mass displacement. These actions reflect a worrying trend within Bangladesh, where religious minorities, especially Hindus, find themselves increasingly vulnerable to state-sponsored neglect and, in some cases, outright hostility.

Most experts are of the view that Yunus’s utterances in China were not just a product of his political aspiration but were also motivated by backing from Pakistan’s deep-state, which still wields disproportionate power over Bangladesh’s geopolitical stance. Pakistan,  India’s foe, has for a long time regarded Bangladesh as a crucial partner in its ever-continuing struggle with India. Yunus’s remarks, in the guise of a challenge to Indian interests, can easily be interpreted as a deliberate bid to appease Pakistan’s Xihadi elements, a designation applied to militant Islamist groups that control segments of Pakistan’s military and spy establishments.

This latest round of diplomatic rapprochement marks a larger pattern in which Bangladesh appears ever more in concert with Pakistan’s anti-Indian propaganda. Pakistan has sought in recent years to improve its relationships with Bangladesh, using economic and military alliances while trying to create divisions between India and Bangladesh. The comments of Yunus, topped off by his previously known pro-Pakistan views, indicate that he is potentially a pawn in the grand geopolitical game played by Pakistan against India. His comments in China, which appeared to undermine Indian interests in the region, can be interpreted as a strategic step to enhance relations with Islamabad, bringing Bangladesh into line with the larger interests of Pakistan’s security and intelligence establishment.

The move to close down the transshipment facility is bound to have a ripple effect throughout the region. Bangladesh, which depends a great deal on India for the transportation of goods to landlocked countries such as Bhutan, Nepal, and Myanmar, now stands in a vulnerable position. These nations, especially Nepal and Bhutan, which have long-standing trade ties with Bangladesh, will be compelled to find new trade routes, perhaps through China or other regional actors, which may complicate the already sensitive geopolitics of South Asia.

Besides, India’s strategic interest in Northeast India is now also incompatible with Yunus’s dream of Bangladesh being a “guardian of the ocean.” India’s northeast region, which houses much of the defense infrastructure of the country, is extremely transit-dependent on Bangladesh. Any alienation from this arrangement could not only hurt economic and trade flows but could even endanger India’s national security interests. The geographic position of Bangladesh, wedged between India and Myanmar, positions it as a critical actor in regulating access to Northeast India, as well as the Bay of Bengal.

India’s decision to stop the transshipment facility may also have wider implications for regional stability. While the decision to close looks like a stern rebuke of Bangladesh, it also heralds a new era of regional competition, one in which Bangladesh’s relations with India could change from cooperation to competition. If Bangladesh continues on its more virulent course against India, especially by playing into the hands of Pakistan’s Xihadi forces, the future of Indo-Bangladeshi relations could be irretrievably lost.

With tensions escalating, India and Bangladesh need to be careful in the next few months. India’s decision to close down the transshipment facility is a strong message that it will no longer stand for inflammatory speeches or activities that threaten its security and economic interests. Simultaneously, Bangladesh needs to understand that its actions can have severe consequences, not just on the bilateral trade front but also on its ties with the region.

Professor Yunus’s participation in these developments is as yet unclear, but his remarks indicate an intensifying alignment of Bangladesh with forces that have long been opposed to India. Whether or not Yunus is acting independently or under duress from foreign powers such as Pakistan’s Xihadi groups is an open question at present. What is certain is that his comments have further stirred an already tense situation, one that may lay the groundwork for even more geopolitics challenges in South Asia.

In the midst of these rising tensions, it is imperative that both India and Bangladesh pursue dialogue and reconciliation. But with the current trend, it seems that the window for diplomatic action is fast closing. The ball is now in Bangladesh’s court—will it decide to de-escalate the situation, or will it continue playing a risky game with forces that destabilize the region? The world watches as this critical chapter in South Asian geopolitics unfolds.