Impact of Bangladesh PM Sheikh Hasina’s Resignation on Indian Trade, Especially Agricultural Commodities

The recent resignation of Bangladesh Prime Minister Sheikh Hasina, following large-scale protests, has led to significant disruptions in Indo-Bangladesh trade, particularly affecting agricultural commodities. The Bangladeshi government declared a three-day trade holiday, suspending activities at all land ports, including the crucial Petrapole port. This move has brought bilateral trade between India and Bangladesh to a standstill, creating a ripple effect on the agricultural sector.

The West Bengal Exporters Coordination Committee, through its secretary Ujjal Saha, reported that the lack of clearance from Bangladeshi customs halted movements at land ports. While there was some initial activity in the morning, it ceased completely later in the day. This disruption is particularly impactful as Petrapole is a major trade hub, handling a significant portion of the bilateral trade.

In the fiscal year 2021-22, India exported agricultural and allied commodities worth approximately US $5541.78 million to Bangladesh, marking a 94% increase from the previous year. Major exports included cotton, wheat, rice (other than Basmati), and sugar. Conversely, India imported agricultural commodities worth US $558.12 million from Bangladesh, with key imports being spices, oil meals, jute, and vegetable oils.

The sudden trade halt has raised concerns about the short-term availability and prices of these commodities. With the border closures, traders are bracing for potential shortages and price hikes. For instance, the cessation of rice and wheat exports could lead to increased prices domestically due to supply constraints.

Sajedur Rahman, general secretary of the Benapole C&F Staff Association, indicated that initial morning movements at the Benapole border also stopped following news of the Prime Minister’s resignation. This uncertainty exacerbates the instability in trade relations between the two countries.

Conclusion:
The resignation of Prime Minister Sheikh Hasina and the ensuing political instability in Bangladesh have profound implications for Indo-Bangladesh trade, particularly in the agricultural sector. The suspension of trade activities and the potential for prolonged disruptions could lead to short-term price spikes for key agricultural commodities. As the situation unfolds, stakeholders in both countries will need to navigate the challenges posed by this unexpected political upheaval.