Processed food exports slow further

Bangladesh's agricultural product exports increased slightly last fiscal year, although shipments to India fell, apparently due to its recent ban on the entry of goods, including processed foods, garments, fruits, and soft drinks, through all land ports except Bhomra.

Local exporters are reporting shipment delays, rising logistics costs, and declining exports as goods must be rerouted through a single port, coupled with a new provision making it mandatory to get all goods tested at laboratories.

According to the Export Promotion Bureau (EPB), Bangladesh exported agricultural products worth $989 million in fiscal year 2024-25, whereas it was $964 million in the preceding fiscal year of 2023-24.

The data show dry food exports fell by more than 14 percent year-on-year, while sugar and confectionery dropped 17 percent.

When it comes to India, goods worth $145 million were exported in FY2024-25. It was $192 million in the preceding fiscal year of 2023-24, according to the EPB.

These declines are directly linked to India's trade restrictions via land ports.

As a result, the overall growth in agricultural product exports stood at only 2.52 percent last fiscal year, whereas it was 3.9 percent in the preceding fiscal year, according to exporters.

The exporters said that had India not banned imports through the land ports in May this year, the overall agricultural product exports would have grown a bit more.

Exporters cautioned that the restriction threatens Bangladesh's efforts to diversify its exports beyond readymade garments (RMG), especially in the agro-processing sector.

Trade associations have reached out to both the Bangladeshi authorities and the Indian High Commission in Bangladesh, but no resolution has been reached to date.

"Businesses are facing mounting challenges as Bhomra remains the only fully operational land port for exports to India," said Kamruzzaman Kamal, marketing director at PRAN-RFL Group, one of Bangladesh's leading exporters of agro-processed goods.

"We are compelled to route all our consignments through the Bhomra port. This significantly increases both transportation time and overall costs," he said.

He further explained that relying solely on the Bhomra port, which is located in Satkhira district, has increased logistics expenses manifold.

"Every shipment now undergoes mandatory lab testing after entry into India. Previously, this wasn't required for all products. It's not a question of quality, it's bureaucracy—delays can stretch up to 10 days," said Kamal.

The northeastern Indian states, such as Guwahati, Agartala, and Manipur, are key markets for Bangladeshi products like dry foods, spices, and processed goods, he said.

However, rerouting through Bhomra requires goods to traverse almost the entire length of Bangladesh, increasing transport costs significantly, he added.

"At this rate, forget profit—we're not even recovering our costs," said Kamal.

"We urge the government to raise this issue diplomatically. If relations with India are friendly, there should be no such trade bottlenecks," he said.

Khurshid Ahmad Farhad, general manager of international business and corporate affairs at Bombay Sweets, highlighted a concerning decline across fast-moving consumer goods (FMCG) exports to India.

"Dry food exports have dropped by 14 percent, sugar and confectionery by 17–18 percent, beverages by 1.52 percent, and spices by 1.18 percent. These numbers are alarming," he said.

"Many companies had long-term export and investment plans in sectors like food processing and plastics. These plans are now in limbo," he said.

He added that while the decline in spice exports may be due to factors such as a rise in raw material costs or a drop in factory output, India's regulatory changes remain a prominent concern for Bangladeshi exporters.

"This situation requires close monitoring. Exporters must now reassess their strategies based on new market dynamics," he warned.

Not all companies have been equally affected. Square Group, a major exporter of agro-products, has largely avoided the impact due to its focus on markets in the US and Europe.

Md Parvez Saiful Islam, COO of Square Food & Beverage Ltd, said, "Companies relying primarily on the Indian market have suffered the most due to the port restrictions."

Industry insiders also point out that, unlike the RMG sector, Bangladesh's agro-processing industry lacks large-scale, export-oriented factories with strong backward linkages and research and development capabilities—weaknesses that are now being exposed.

The Ministry of Commerce had earlier set a target of 15 percent growth in agro-processed food exports for this fiscal year. However, with the current disruption, that target now appears increasingly unattainable.

Industry leaders and trade associations are calling for swift and effective diplomatic efforts to resolve the issue and restore smooth trade relations with India.