Bangladesh Expands Air Cargo After India Ends Transit Deal

Bangladesh is significantly enhancing its air cargo infrastructure following India’s unexpected decision to suspend a key transshipment facility. The move aims to ensure smooth export operations and strengthen Bangladesh’s ambition to become a regional logistics hub.

On April 8, India’s Central Board of Indirect Taxes and Customs withdrew a four-year-old facility that allowed Bangladeshi goods—especially ready-made garments—to be shipped via Indian airports such as Kolkata and Delhi to global destinations. The abrupt cancellation disrupted a vital trade route that had supported exporters during the COVID-19 pandemic.

Roughly 600 tonnes of garments—accounting for around 18% of Bangladesh’s weekly air exports—had been routed through India. In response, the government is fast-tracking a series of initiatives to boost self-reliant freight capacity, focusing on infrastructure expansion, cost reduction, and greater operational efficiency.

The Civil Aviation Authority of Bangladesh (CAAB) and Biman Bangladesh Airlines are working jointly to revise tariffs and streamline ground-handling processes to make air cargo services more competitive.

CAAB Chairman Air Vice Marshal M Mofidur Rahman Bhuiyan said efforts are underway to deploy additional manpower, reduce service fees, and simplify export procedures to maintain continuity. He noted that directives have been issued to ensure uninterrupted cargo movement, with announcements on cost reductions expected soon.

At Hazrat Shahjalal International Airport (HSIA), extra personnel have already been deployed. Meanwhile, Sylhet’s Osmani International Airport is preparing to launch full-fledged cargo services from April 27. The airport will dispatch its first cargo flight—operated by Galistair Aviation—carrying 60 tonnes of garments to Spain. Equipment has been transferred from Dhaka, and Biman has recruited 400 new ground-handling staff, expanding its team to 1,100.

Chattogram airport is also being prepared for cargo operations, with similar expansions expected at other regional airports. Voyager Airlines is set to commence cargo flights from Sylhet, while talks with international carriers such as Turkish Airlines are underway to increase outbound capacity from multiple airports.

To ease congestion, customs clearance at key terminals is being expedited.

The soon-to-be-operational third terminal at HSIA is expected to be a game-changer. Once fully functional later this year, it will increase the airport’s annual cargo handling capacity from 200,000 to 546,000 tonnes. The terminal includes a 36,000-square-metre dedicated cargo area equipped with automation and modern storage systems. CAAB expects operations to begin within six months, pending finalisation of an agreement with a Japanese consortium.

Despite these advancements, exporters are still burdened by high freight charges. Air shipment from Dhaka to Europe currently costs between $6.30 and $6.50 per kilogram, and to the US between $7.50 and $8.00—significantly higher than rates in Kolkata or the Maldives. Ground-handling charges at HSIA are six times higher than in Delhi, and jet fuel prices in Dhaka remain about 30% more expensive.

Leaders from the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Bangladesh Freight Forwarders Association (BAFFA) have called on the government to narrow these cost disparities and enhance coordination among relevant agencies. They have also suggested exploring alternative shipping routes via the UAE, Sri Lanka, and the Maldives.

The Executive Chairman of the Bangladesh Investment Development Authority (BIDA), Chowdhury Ashiq Mahmud Bin Harun, described the situation as an opportunity to activate underutilised airports in Sylhet, Chattogram, Saidpur, and Lalmonirhat. He stressed the importance of expanding air cargo capacity to attract investments and improve trade facilitation.

Biman’s Director of Cargo, Shakil Miraj, said Sylhet’s modern terminal infrastructure is capable of handling two to three times more cargo than its current volume, paving the way for broader operations.

Although India’s decision disrupted existing trade routes, Bangladesh’s rapid response and investment in its own air freight capabilities may mark a shift toward greater self-reliance. With strategic planning, infrastructure upgrades, and stronger global partnerships, the country is well-positioned to become a key air cargo hub in South Asia.