India’s recent trade restrictions on imports from Bangladesh are expected to have significant long-term implications for Bangladesh’s employment landscape, particularly within the formal sector.

According to International Labour Organisation (ILO) Country Director Tuomo Poutiainen, while immediate disruption to jobs is unlikely-given that much of Bangladesh’s workforce is employed informally in agriculture and small-scale enterprises-the formal business sector, which is more reliant on cross-border trade and global supply chains, could face mounting challenges over time.

The new Indian policy, announced by the Ministry of Commerce and Industry, restricts several categories of Bangladeshi goods-including ready-made garments and processed foods-to entry only through two designated seaports (Nhava Sheva and Kolkata), effectively banning their import through land ports.

This impacts goods worth approximately $770 million-about 42% of Bangladesh’s total exports to India-primarily targets sectors that are major formal employers, such as the garment industry. The restrictions are widely viewed as a response to Bangladesh’s recent curbs on Indian yarn, rice, and other goods, as well as the imposition of transit fees on Indian cargo, signalling a shift away from previously cooperative trade relations.

Poutiainen emphasised that the long-term effects could reshape the formal employment environment, as businesses dependent on Indian market access and efficient logistics may be forced to adapt or downsize.

He stressed the importance for Bangladesh to continually recalibrate its employment policies, invest in workforce skills, and diversify its export base to mitigate these risks. The ILO official also highlighted the need for Bangladesh to maintain a clear understanding of its trade agreements and to engage actively in negotiations with trading partners to safeguard its economic resilience.

While Bangladesh’s informal economy may shield it from immediate job losses, the formal sector-especially export-oriented industries-faces potential long-term employment challenges due to India’s trade restrictions. Strategic adaptation, skills development, and export diversification are seen as critical measures for Bangladesh to navigate these evolving trade dynamics.

Based On ANI Report