Bangladesh’s Imports from India Grow Fastest Despite Calls to Cut Reliance

Despite repeated calls by the interim government to reduce dependence on India, Bangladesh recorded its fastest import growth from its neighbor in the 2024–25 fiscal year, according to the Bangladesh Economic Review 2025.
The review shows that Bangladesh’s overall import expenditure grew by 2.44 percent in FY2024–25, while imports from India rose by 7.83 percent year-on-year—outpacing growth from other major sources. Import payments to India increased from USD 8.99 billion in FY2023–24 to USD 9.69 billion in FY2024–25.
The surge comes amid strained bilateral relations following the political upheaval in Bangladesh on August 5, 2024, when then-prime minister Sheikh Hasina was ousted and later took refuge in India. The interim government was formed three days later, and since then senior officials have publicly emphasized reducing India-centric trade dependence.
Several measures were announced to that end, including plans to source rice from countries such as Myanmar, Thailand and Pakistan, efforts to diversify onion and potato imports, restrictions on importing yarn through land ports, and bans on a range of Indian products including newsprint, powdered milk, ceramic ware and sanitary items. Social media campaigns also called for boycotting Indian goods.
However, none of these steps significantly dented import volumes. Economists and trade analysts attribute the continued growth largely to market dynamics and government-to-government procurement from India.
China remained Bangladesh’s largest import source, accounting for 30.02 percent of total imports in FY2024–25, followed by India with 14.18 percent and the United States with 3.67 percent. Together, China and India supplied more than 44 percent of Bangladesh’s total imports.
While imports from India and China increased, purchases from several other major partners declined. Imports from the United States fell by 13.07 percent, while shipments from Malaysia and Taiwan dropped by 14.18 percent and 8.01 percent respectively.
Trade frictions between Dhaka and New Delhi intensified in 2025 after India withdrew transshipment facilities for Bangladeshi goods to third countries and both sides imposed restrictions on land-port trade for selected products. These steps disrupted exports, particularly for small and medium Bangladeshi exporters, but had limited impact on imports from India.
Economist and CPD Distinguished Fellow Professor Mustafizur Rahman said import patterns are driven primarily by price competitiveness, lead time and product availability. “As long as goods can be sourced more cheaply and quickly from neighboring countries like India and China, imports will continue despite political or administrative barriers,” he noted.
Former diplomat M Humayun Kabir observed that while political and diplomatic tensions persist, economic and people-to-people links remain active. “If political relations deteriorate further and translate into hard policy decisions, trade will eventually be affected. For now, the economic channels are still functioning,” he said.
Analysts agree that reducing import dependence will require long-term investment in domestic industrial capacity and broader diversification of import sources—challenges that remain critical for Bangladesh’s economy amid ongoing regional and geopolitical uncertainties.