Merchandise shipments to India through the country’s premier seaport in Chattogram have surged after New Delhi imposed restrictions on goods entering through land ports.
Over the past four months, India has introduced three separate restrictions on Bangladeshi exports of items such as garments, processed food, plastics, yarn, furniture and, most recently, raw jute and jute products.
Sea routes are still open for Indian importers, but they are slower and costlier. Bangladeshi goods now travel from Chattogram to Colombo before reaching Kolkata or Mumbai’s Nhava Sheva port.
Despite the added time and expense, Indian importers have continued sourcing from Bangladesh due to the lack of viable alternatives.
Abul Bashar, chairman of BSM Group, said businesses always calculate time and cost.
“That is why Indian importers have not stopped,” he said, adding that sea routes from Bangladesh to India can still be cheaper than sourcing from other countries.
Similar to Bashar, Syed Tanvir Ahmed, managing director of Pacific Jeans, said trade costs are higher by sea, but duty-free access keeps Bangladeshi garments attractive.
“The problem is that all this trade is now funnelling through the lone gateway of Chattogram port,” said Ahmed.
While Chattogram has so far absorbed the redirected flow, shipments to India through the 11 land ports, as well as Mongla and Pangaon, have fallen by nearly 15 percent in value and 19 percent in volume.
SHARP JUMP THROUGH CTG PORT
Exports to India through Chattogram port rose 139 percent year-on-year in the first eight months of this year to $338.2 million, up from $141.4 million a year earlier, according to the National Board of Revenue (NBR) and Chattogram Customs House.
In the same period, volumes more than doubled to 116,000 tonnes from 60,525 tonnes.
In the first eight months of this year, Bangladesh exported 760,000 tonnes of goods worth $1.2236 billion to India. In the same period last year, exports reached 854,000 tonnes valued at $1.1844 billion.
This represents a rise in earnings of $39.2 million or 3.31 percent, but a fall in volume of 93,000 tonnes or 10.9 percent.
Of this, shipments through Chattogram, Mongla and the country’s largest land port, Benapole, totalled $824 million compared with $770 million in the same period last year.
In the January-August period this year, exports through all gateways except Chattogram port amounted to 644,000 tonnes worth $885.4 million, down from 792,000 tonnes worth $1.04 billion a year earlier.
In other words, exports outside Chattogram fell by $157.6 million in value and 148,000 tonnes in volume.
Benapole, once the busiest land port for bilateral trade, suffered the steepest losses.
In the first eight months of this year, shipments through Benapole dropped to 201,000 tonnes worth $486 million, from 281,000 tonnes worth $623.8 million last year, a 22 percent decline in value and a 29 percent fall in volume.
Mongla port also saw exports collapse. Goods worth $5.3 million moved to India through Mongla in the first eight months of 2024. But during the same period this year, exports declined to just $91,000.
CTG PORT CARRYING A HEAVY LOAD
The new trade flow with India has piled pressure on Chattogram port, which already handles about 84 percent of Bangladesh’s total international trade.
The port’s storage capacity is 53,500 twenty-foot equivalent units (TEUs), and operations remain smooth if container numbers stay below 40,000.
But since March, volumes have consistently exceeded 43,000 TEUs. On August 16, storage reached a record 49,131 TEUs, causing fears of congestion spiralling out of control.
“Increasing reliance on a single port is not healthy for Bangladesh,” said Khairul Alam Suzon, vice-president of the Bangladesh Freight Forwarders Association.
“If the government does not accelerate modernisation of secondary ports, Chattogram will become increasingly overstretched, undermining both efficiency and competitiveness,” he added.
Suzon said the capacities of Pangaon and Mongla remain far below Chattogram’s. Long-term planning is required to develop infrastructure, procure modern equipment and improve facilities at other gateways, especially Kamalapur ICD, Pangaon and Mongla.
Dhaka-based importer Wahiuzzam Chowdhury said many traders had shown interest in using Kamalapur ICD to reduce the pressure on Chattogram. But where it once took four to five days to move goods by train from the port to Kamalapur, it now takes 25 to 30 days due to a shortage of locomotives.
“How can Kamalapur ICD then be considered a viable alternative to Chattogram?” he asked.
Pacific Jeans Managing Director Ahmed said congestion at Chattogram has now become almost structural.
Azhar Uddin Mahmud, a logistics consultant, said the situation could damage Bangladesh’s reputation with buyers. “If the largest port continues to operate beyond safe capacity for months, exporters may miss delivery deadlines. That could cost the country hard-earned market trust,” he said.
Rear Admiral SM Moniruzzaman, chairman of the Chattogram Port Authority (CPA), also believes that exclusive reliance on Chattogram poses serious risks.
At a seminar on Saturday, he said, “If any unforeseen disruption occurs here [port], the national economy could collapse, as we have failed to develop an alternative seaport.”
At the same event, Shipping Adviser Brigadier General (Retired) M Sakhawat Hussain said the government is working to ease the strain.
“The Bay Terminal being built beside Patenga sea beach will reduce congestion once operational,” he said. “We are also taking initiatives to enhance the capacities of Mongla, Pangaon and Payra ports.”
The article appeared in thedailystar
