Move expected to curb Chinese fabric inflow and boost local manufacturing amid rising trade tensions
India’s decision to restrict textile and garment imports from Bangladesh via land routes may open up a ₹1,000–2,000 crore opportunity for Indian manufacturers while curbing the indirect entry of Chinese fabric. The policy shift, announced by the Directorate General of Foreign Trade (DGFT), is seen as a strategic trade move that could realign supply chains and strengthen the domestic textile industry, reported timesofindia.indiatimes.com.
The restriction may lead to a 2–3% hike in prices of garments like T-shirts and denims this winter, but industry leaders say the long-term impact will favor India’s self-reliance and MSME ecosystem.
As per the DGFT notification issued Saturday, all garment and related product imports from Bangladesh are now banned through land ports, although shipments are still allowed via the Kolkata and Nhava Sheva seaports. The step comes amid rising concerns over duty-free textile imports from Bangladesh under India’s zero-duty policy, which has made it a popular backdoor route for Chinese-origin fabrics that otherwise attract a 20% import duty if brought in directly from China.
Rakesh Mehra, Chairman of the Confederation of Indian Textile Industry (CITI), described the move as a firm response to Bangladesh’s April 2025 decision to restrict Indian cotton yarn exports—a product that makes up about 45% of India’s yarn exports. “This will increase the cost of Bangladesh imports and redirect opportunities to Indian ready-made garment (RMG) manufacturers,” Mehra said.
He also noted that domestic cotton yarn producers could now shift supply inward to meet a possible demand gap, strengthening India’s textile value chain.
Echoing similar sentiments, Santosh Katariya, President of the Clothing Manufacturers Association of India (CMAI), called the restriction a long-overdue response to the dumping of low-cost foreign apparel, which has hit Indian MSMEs hard. “The government’s move addresses industry concerns and reinforces India’s self-sufficiency in apparel production. However, capacity-building and ease of doing business must follow,” he added.
Bangladesh currently accounts for 35% of India’s total apparel imports, though overall imports meet just 1–2% of domestic demand. Still, the effect on some supply chains could be significant, particularly for MSME garment retailers and large-format fashion brands that rely on Bangladesh for cost-efficient products.
Prabhu Dhamodharan, convenor of the Indian Texpreneurs Federation, told The Economic Times, “The reduction in imports through land ports will definitely support local manufacturers and encourage stronger domestic production.”
While there may be short-term disruptions, experts see the policy as a push towards long-term structural growth in India’s textile sector.