Bangladesh's RMG export is adapting to India's revocation of trans-shipment services, marked by maiden freighter flight carrying 60 metric tons of RMG for Inditex from Sylhet's Osmani International Airport. This move towards increasing independent air cargo capabilities comes as the industry grapples with the commercial impact of higher transportation costs while recognizing the critical need for lead time control in the fast-paced fashion world.

India's April 8 decision to halt Bangladesh's access to its land, sea, and air logistics network cited congestion and rising costs within its own infrastructure due to the volume of Bangladeshi exports. This abrupt change forced Bangladesh to fast forward its plans for self-reliant air freight options.

Previously, the trans-shipment route through India was a cost-effective, albeit sometimes time-consuming, for many exporters, especially those located closer to the border. Data from the Bangladesh Freight Forwarders Association highlights this reliance: between January 2024 and March 2025, 18 per cent of Bangladesh's garment air cargo, amounting for over 34,900 metric tons valued at $462.34 million, utilized Indian airports, primarily Delhi and Kolkata.

The dual commercial impact

The immediate commercial impact of the trans-shipment ban has been an increase in transportation costs. As Wenwen Zhang of Xeneta pointed out, air freight spot rates from Bangladesh to Europe rose 12 per cent in the week ending April 20, directly linked to the removal of the Indian transit option. This rise poses a challenge to Bangladeshi apparel manufacturers, who operate in a highly competitive global market with tight margins.

However, the increased expenditure must be weighed against the crucial need for lead time control, particularly in the fast-fashion sector. Retail giants like Inditex operate on tight schedules, requiring rapid delivery of goods to meet consumer demand and adapt to evolving trends. Air freight, while more expensive than land or sea trans-shipment, offers faster transit times ensuring that garments reach their destination quicker. In fact, Inditex's utilization of the inaugural Sylhet-Zaragoza freighter flight exemplifies this trade-off. While air freight incurs higher costs compared to previous trans-shipment methods, the ability to directly ship 60 tons of RMG to Spain ensures reduced lead time. This speed is paramount for Inditex to maintain its agile supply chain and respond swiftly to market demands. This decision suggests that for time-sensitive shipments and key markets, the benefits of faster delivery outweigh the increased transportation expenses.

Table: Bangladesh's RMG exports via Indian airports (Jan 2024 - Mar 2025)

Efforts to mitigate cost impacts

Recognizing the cost implications, the Bangladeshi government anticipates that the new air freight initiative will eventually lead to a reduction in air freight costs to Europe by up to 13 per cent. This projected decrease is crucial for the long-term viability of direct air cargo routes. Incentivizing more airlines to operate from Bangladesh's airports, as urged by the BGMEA, is another strategy to increase competition and potentially drive down freight rates.

The ongoing upgrades to airport infrastructure, such as that in Sylhet and the planned resumption of cargo flights from Chattogram, are essential steps in building a robust and potentially more cost-effective air cargo ecosystem within Bangladesh.

The broader global trade environment adds another layer of complexity to the cost equation. Fluctuations in fuel prices, insurance costs, and potential shifts in demand due to tariff changes can all influence air freight rates. While the potential for increased air freight capacity due to changes in US-China trade dynamics could offer some relief in the long run, the immediate focus for Bangladeshi exporters is managing the current cost increase while capitalizing on the speed and reliability of direct air cargo.

The revocation of India's trans-shipment services has undeniably created a commercial challenge for Bangladesh's apparel exporters with higher transportation costs. However, the proactive development of direct air cargo routes, as demonstrated by the Sylhet initiative and Inditex's participation, highlights a strategic move towards prioritizing lead time control – a critical factor in the fast-fashion industry. The long-term commercial impact will depend on the success of government and industry efforts to optimize air cargo operations, attract more carriers, and potentially negotiate more favorable rates. The balancing act between managing increased expenses and ensuring timely delivery will be a defining factor in the future competitiveness of Bangladesh's apparel exports.