India’s recent trade policy shift - restricting garment imports from Bangladesh through land ports - is set to unlock a ₹1,000–2,000 crore opportunity for domestic textile manufacturers, even as it temporarily disrupts supply chains and raises costs for global and Indian apparel brands.
In a notification issued by the Directorate General of Foreign Trade (DGFT) on Saturday, the Indian government barred textile and garment imports from Bangladesh via land routes. However, sea shipments through Kolkata and Nhava Sheva ports will continue to be permitted. The decision aims to curb duty-free inflows under India’s existing zero-duty regime with Bangladesh, which industry leaders claim has been exploited for backdoor entry of Chinese-origin fabrics.
Policy Aimed at Self-Reliance and Trade Balance
The move comes amid mounting industry concerns over rising imports of low-cost garments that were hurting domestic MSME manufacturers. The decision also serves as a retaliatory measure, following Bangladesh’s restriction on cotton yarn imports from India - a commodity that comprises nearly 45% of India’s total yarn exports.
“This is a strategic response to protect domestic interests,” said Rakesh Mehra, Chairman of the Confederation of Indian Textile Industry (CITI). “It not only counters Bangladesh’s cotton yarn ban but also redirects India’s textile exports back to local markets, plugging gaps and promoting indigenous value chains.”
Impact on Apparel Prices and Brands
The policy shift may lead to short-term disruptions in supply chains, especially for large-format retailers and global brands sourcing ready-made garments (RMG) from Bangladesh. According to experts, prices of garments like T-shirts and denim could witness a 2–3% hike this winter as retailers adjust to the new regime.
“Bangladesh accounts for over 35% of India’s garment imports and around 1–2% of domestic apparel consumption. A reduction in these imports will create fresh opportunities for local manufacturers,” said Prabhu Dhamodharan, convenor of the Indian Texpreneurs Federation.
Industry Voices Welcome the Move
The decision has been largely welcomed by Indian textile associations and stakeholders who view it as a much-needed intervention to check the dumping of foreign-made garments into Indian markets.
“This is a long-standing demand of the industry. The unchecked inflow of duty-free garments was severely affecting our MSMEs,” said Santosh Katariya, President of the Clothing Manufacturers Association of India (CMAI).
He added that the measure should be followed by capacity building, policy support, and ease-of-doing-business reforms to make India globally competitive in textile production.
Indirect Impact: Curbing Chinese Fabric Backdoor
Industry insiders have also pointed to the indirect benefits of this move — especially in tackling the backdoor routing of Chinese textiles. Under current trade rules, direct imports from China attract a 20% duty, but those routed via Bangladesh under SAFTA (South Asian Free Trade Agreement) were entering India duty-free.
By limiting land access, the Indian government hopes to reduce this loophole, discouraging the use of Chinese-origin fabric disguised as Bangladeshi-made.
Conclusion
While the new import restriction may result in short-term pricing pressures, it is poised to act as a catalyst for strengthening India’s domestic textile sector, enhance Aatmanirbhar Bharat efforts, and restore balance in trade relations with Bangladesh. The real challenge now lies in ensuring that domestic manufacturers — especially MSMEs — can rapidly scale up production and meet demand without compromising quality or cost-efficiency.