Bangladesh buys cheaper Indian rice amid strained ties

Bangladesh’s interim government has approved the import of 50,000 tonnes of non-basmati rice from India’s M/S Pattabhi Agro Foods at $355.77 per tonne. Bangladeshhas approved the import of 50,000 tonnes of non-basmati parboiled rice from India's M/S Pattabhi Agro Foods at $355.77 per tonne, a decision driven by economic considerations despite ongoing political tensions. This price is significantly lower than a simultaneous purchase of the same amount from Pakistan at $395 per tonne, resulting in savings of approximately $2 million for Bangladesh.

This decision underscores the continuing economic interdependence between the two neighbours despite recent diplomatic strains. The move saves roughly $2 million compared with an equivalent quantity sourced from Pakistan at about $395 per tonne.

The Cabinet Committee on Government Purchase recommended the purchase at a meeting chaired by Finance Adviser Dr Salehuddin Ahmed, who emphasised that trade policy is driven by economic considerations rather than political rhetoric. He noted that Bangladesh will import rice from India if it is competitively priced, reflecting a pragmatic approach even as recent political developments have tested ties.

Trade continues amid political tensions

The decision comes against a backdrop of strained diplomatic relations following the ouster of former prime minister Sheikh Hasina in 2024 and the establishment of an interim government. Despite heightened political rhetoric, economic transactions have persisted — including staple imports such as rice — demonstrating that food security imperatives often outweigh geopolitical friction.

Bangladesh’s food ministry also approved other essential commodity imports, including edible oils and lentils, as part of efforts to ensure adequate supplies ahead of the holy month of Ramadan. The larger import package reflects a broader strategy to stabilise domestic markets.

Economic rationale, food security

• Supplier & price (India): M/S Pattabhi Agro Foods will supply 50,000 metric tonnes at $355.77 per tonne.
• Supplier & price (Pakistan): An additional 50,000 metric tonnes will be imported from Pakistan on a government-to-government basis at the higher price of $395 per tonne.
• Rationale: Finance Adviser Salehuddin Ahmed emphasized that trade decisions are based on competitive rates and food security, not political rhetoric. Bangladesh is building its food stocks ahead of potential shortages, including those tied to the demand during Ramadan.
• Context: The decision was made by the Cabinet Committee on Government Purchase amid diplomatic strain following the ouster of Sheikh Hasina in 2024 and friction under interim leader Muhammad Yunus.

Finance Adviser Salehuddin Ahmed reiterated that decisions on sourcing rice are shaped by cost competitiveness and the need to maintain stable supply chains. He pointed out that alternative sources could be significantly more expensive, reinforcing the economic logic behind the Indian purchase.

Bangladesh has in recent years relied heavily on rice imports to supplement domestic production and build buffer stocks. Earlier plans included importing food grains totalling hundreds of thousands of tonnes — both rice and wheat — to bolster stocks and mitigate price volatility in the domestic market. Such imports aim to pre-empt shortages and contain inflation, particularly ahead of periods of heightened demand.

Rice import patterns reflect both market forces and logistical considerations. Indian exporters remain competitive on price, partly due to India’s surge in rice production and inventories, which reached record levels in late 2025, with exports up about 37% year-on-year, strengthening India’s position as a leading global supplier.

Not only rice

Furthermore, the interim government of Bangladesh plans to acquire 3.75 crore litres of soybean oil via direct purchases from Nigeria and the United States of America. Of this total, 1.25 crore litres will be sourced from the US at a price of Tk 132.69 per litre, whereas Nigeria will provide soybean oil at Tk 121.32 per litre.

Additionally, the meeting sanctioned the awarding of a contract to Sinopec International Petroleum Service Corporation for the drilling and development of four wells in the Shahbazpur and Bhola gas fields.