The hidden cost of India’s restriction on Bangladeshi visas

Bangladeshi tourists and medical travellers are choosing other neighboring countries due to India’s strict visa restrictions

Originally published on Global Voices

The August 2024 political upheaval in Bangladesh, which is marked by former Prime Minister Sheikh Hasina’s forced ouster, triggered a chain reaction throughout South Asia. India responded by sharply restricting visa issuance to Bangladeshi citizens, citing security concerns amid rising anti-India sentiment. The decision came swiftly and decisively.

Where India’s High Commission in Dhaka once processed 8,000 visas daily, now only emergency medical and student visas trickle through in limited numbers.

The numbers tell a stark story of interdependence. From April 2023 to March 2024, more than 2.1 million Bangladeshis visited India, accounting for 22 percent of all foreign tourist arrivals. They came for medical treatment, shopping, cultural festivals, and family visits. They filled hotels, packed restaurants, and kept thousands of small businesses afloat. India issued over 2 million visas annually to Bangladeshis, most for medical purposes. Then, almost overnight, that flow stopped.

Kolkata's “Mini Bangladesh” goes dark

When walking through Free School Street, Marquis Street, or Sudder Street in Kolkata today visitors find a ghost town where a thriving commercial hub once stood. This two-square-kilometer area, nicknamed “Mini Bangladesh,” served as the epicenter of Bangladeshi economic activity in India. Conservative estimates place losses at INR 1,000 crore (USD 110.8 million), though actual losses across New Market and Burrabazar likely exceed INR 5,000 crore (USD 554 million).

Every day, INR 3 crore (USD 332,400) in business has simply evaporated. Currency exchanges that once bustled with customers exchanging Bangladeshi Taka now sit dormant, their electronic displays gathering dust. Travel agencies that booked hundreds of hotel rooms weekly report days without a single customer. Hotels that once operated at 80-90 percent occupancy now struggle to fill 5 percent of their rooms.

By November 2024, four businesses had permanently shuttered, with more closures anticipated. Around 150 hotels face existential threats. Nearly 3,000 shops in the area confront the same grim reality. Approximately 40 percent of small and mid-sized restaurants have closed their doors, unable to survive without their primary customer base.

Around 15,000 families depend directly on this tourism ecosystem. Homestay operators who rent rooms to visiting families earn nothing. Tour guides fluent in Bengali find no one to guide. Taxi and auto-rickshaw drivers who specialize in airport pickups and city tours sit idle. Street food vendors who thrived on Bangladeshi customers’ love for Indian street food watch their businesses wither.

Medical tourism’s dramatic decline

India’s healthcare sector faces an even starker reality. Bangladesh made up 69 percent of India’s medical tourists, creating an over-reliance that now threatens the country’s entire medical tourism industry. This concentration made India vulnerable to diplomatic disruptions.

The year-over-year decline tells a story: a 43 percent drop in November 2024, followed by 59 percent in December. Despite restrictions, approximately 482,000 Bangladeshis still managed to reach India for medical treatment in 2024, down from 500,000 in 2023. Yet this represents patients with emergency medical visas only — the broader medical tourism market has collapsed.

These patients brought billions in revenue. They chose hospitals in Kolkata, Chennai, Mumbai, and Bengaluru for treatments ranging from cardiac surgery to cancer care. Now those hospital beds remain empty.

The infrastructure that supported this medical tourism pipeline has stalled. The Maitree Express, Bandhan Express, and Mitali Express, the trains connecting India and Bangladesh, have suspended operations since August 2024. Patients who once made comfortable train journeys to Indian hospitals now face impossible barriers.

CareEdge Ratings estimates a 10–15 percent reduction in total medical tourism to India long-term. This decline reshapes the entire sector’s economics and forces painful strategic recalculations.

Ripples across sectors

The impact of the restrictions extends beyond tourism and healthcare. Cross-border business travel restrictions complicate trade relationships, slow deal-making, and create friction in supply chains.

Transportation infrastructure has suffered dramatically. Bus services between the two countries dropped from seven daily trips to just one or two, carrying 28 passengers each. The ripple effects touch tour operators, bus companies, and the entire logistics ecosystem supporting cross-border movement.

Retail shopping tourism, once a major draw in New Market and Burrabazar, has virtually disappeared. Bangladeshi shoppers came not just for goods unavailable at home but for the shopping experience itself. That retail ecosystem is now fighting for survival.

New destinations for medical tourism

Bangladeshi patients haven’t stopped seeking treatment abroad. They’ve simply changed destinations. Thailand has emerged as the frontrunner, reporting a 200 percent increase in inquiries from Bangladeshi patients. Thai hospitals provide streamlined visa procedures, with medical institutions assisting with applications.

In 2019 alone, Bangladeshis spent over THB 6.7 billion (USD 212.9 million) on medical treatment in Thailand. That figure has likely grown substantially since India’s restrictions tightened.

China has spotted the strategic opportunity. Bangladesh held medical tourism conferences with Chinese officials in Yunnan province, exploring partnerships ahead of the 50th anniversary of China-Bangladesh diplomatic relations in 2025. Plans for a “friendship hospital” in Dhaka signal China’s long-term commitment to capturing this market.

Political strains, visa delays, and what patients describe as an “unwelcoming environment” in India continue pushing Bangladeshis toward alternatives. Each month of restrictions cements these new patterns. Each positive experience in Thailand or Malaysia makes a return to India less likely.

Tourists pivot to neighboring countries

Leisure tourism shows even more dramatic shifts. Sri Lanka experienced a 121.6 percent increase in Bangladeshi arrivals in 2024, welcoming 39,555 tourists. Bangladesh became Sri Lanka’s second-fastest-growing tourism source market, filling hotels and attractions that benefited from India’s restrictions.

The Maldives saw a 52 percent increase, hosting 33,295 Bangladeshi arrivals. These travellers tend to be affluent, often seeking beach resorts and luxury experiences. Nepal welcomed 48,848 Bangladeshi visitors in 2024, up from 36,483 in 2023 — a 34 percent jump.

India previously attracted 40–45 percent of all Bangladeshi outbound tourists. Cultural ties, proximity, familial and historical connections made India the natural first choice. Now that the dominant position crumbles. From August to October 2024, Bangladeshi visitors to India dropped 28.44 percent year-over-year.

The diplomatic paradox

Prime Minister Modi speaks of maintaining “people-to-people” relationships with Bangladesh. The phrase appears in diplomatic statements and official communications. Yet how can people-to-people relationships survive when people cannot meet?

The impact can already be seen. According to International Crisis Group, New Delhi’s refuge to Sheikh Hasina, who have already been convicted in Bangladesh is adding fuel to fire. After Hasina’s pro-India Awami League was forced out following the July 2024 upheavals, rightwing parties more skeptical of — and at times openly hostile toward — India stepped into the spotlight, amplifying voices that have helped sway public opinion against India amid decades of mistrust.

Families can’t visit relatives for weddings, funerals, or festivals. Business partners struggle to maintain collaborations without face-to-face meetings. Professor Imtiaz Ahmed describes the restrictions as “inhumane and unbecoming of a neighboring country,” noting the contradiction between stated desires for people-to-people ties and policies that prevent people from actually meeting.

Each month of restrictions makes reconciliation harder. Young people in both countries grow up knowing borders as barriers rather than bridges.

The true price of closed borders

The numbers don’t lie. India has lost INR 5,000 crore (USD 554 million) of revenue in Kolkata alone. At least 69 percent of medical tourists were diverted elsewhere. And in India, 15,000 families are facing financial ruin due to the harsh visa restrictions. Meanwhile, India’s neighbors are feeling the boon as a regional realignment unfolds in real time.

Can “people-to-people” relationships survive when people cannot actually meet? Young professionals build networks in Bangkok instead of Kolkata. Patients develop loyalty to Thai hospitals rather than Indian ones. Tourists discover Sri Lankan beaches instead of Indian heritage sites. These aren’t temporary shifts — they’re permanent realignments.

While the visa and travel restrictions remain, India is losing revenue, influence, and goodwill. While Bangladesh loses convenient access to quality healthcare and cultural connections. How long can both nations tolerate this lose-lose situation before the losses become permanent?