Import Ban Sparks Rs 2,000 Cr Opportunity For Indian Textiles

India’s recent move to restrict garment imports from Bangladesh via land routes is expected to unlock a Rs 1,000-2,000 crore opportunity for the domestic textile sector, even as it temporarily disrupts supply chains of major apparel brands and pushes up prices of key items like T-shirts and denims by 2-3% this winter.

The Directorate General of Foreign Trade (DGFT), through a notification issued on Saturday, prohibited the import of garments and other textile products from Bangladesh through land ports. However, shipments through the seaports of Kolkata and Nhava Sheva will continue to be allowed. The decision comes amid growing concerns over a surge in duty-free textile imports from Bangladesh, made possible under India’s zero-duty trade policy with its neighbor.

Industry leaders believe the move will give a much-needed fillip to local garment manufacturers, reduce dependence on foreign-made clothing, and check the backdoor entry of Chinese textiles via Bangladesh, which would otherwise attract a 20% import duty if imported directly from China.

Rakesh Mehra, Chairman of the Confederation of Indian Textile Industry (CITI), described the decision as a strategic countermeasure to Bangladesh’s restriction in April 2025 on Indian cotton yarn exports, a significant setback given that Bangladesh accounts for nearly 45% of India’s total cotton yarn exports. “This policy is a calibrated response and is likely to make Bangladesh-made garments costlier, while creating headroom for Indian ready-made garment (RMG) manufacturers and cotton yarn producers to fill the demand gap,” Mehra said.

Echoing similar views, Santosh Katariya, President of the Clothing Manufacturers Association of India (CMAI), said the restriction addresses the domestic industry’s long-standing concerns over the inflow of cheap imported garments. “This move will help curb the dumping of foreign-made apparel, particularly into the MSME-driven retail sector, and strengthen India’s push for self-reliance in garment manufacturing,” he stated. Katariya emphasized, however, that policy moves like this should be coupled with stronger support for capacity building, compliance simplification, and competitiveness enhancement for Indian manufacturers.

Bangladesh currently supplies around 35% of India’s total garment imports, though imports constitute only 1–2% of India’s overall apparel consumption. The policy shift is expected to impact sourcing strategies of both MSME units and large apparel brands, potentially leading to short-term supply disruptions and a modest price escalation in the retail market.

While the immediate effect could include supply bottlenecks, industry insiders view the restriction as a pivotal opportunity to recalibrate India’s textile trade dynamics and encourage the growth of a more resilient and competitive domestic apparel ecosystem.