India's Ban on Land Route Garment Imports from Bangladesh Opens Rs 1,000 Crore Window For Local Textile Sector

India's restriction on Bangladeshi garment imports via land routes, reported by TOI and ET, is expected to create a Rs 1,000–2,000 crore opportunity for domestic textile firms. While it may spur local manufacturing, industry experts warn of a potential 2–3 per cent price hike on popular apparel this winter. The policy came into effect on Saturday.

In a move likely to reshape South Asia's textile trade, the Indian government has banned the import of garments and textile products from Bangladesh via land routes, a decision that could open up a Rs 1,000–2,000 crore opportunity for India's domestic manufacturers. According to The Times of India (TOI) and The Economic Times (ET), the restriction-announced in a Directorate General of Foreign Trade (DGFT) notification-only permits shipments through Kolkata and Nhava Sheva seaports. The policy came into effect on Saturday.

The decision follows mounting concerns over rising duty-free textile imports from Bangladesh, which enjoys zero-duty access under South Asian trade agreements. Analysts expect this move to strengthen India's self-reliance in the readymade garments (RMG) sector and reduce the indirect routing of Chinese fabrics-subject to a 20 per cent duty if imported directly-via Bangladesh.

Industry leaders view the step as both retaliatory and strategic. In April 2025, Bangladesh imposed curbs on the export of cotton yarn from India, which historically accounts for nearly 45 per cent of India's cotton yarn exports. As TOI quoted Rakesh Mehra, Chairman of the Confederation of Indian Textile Industry (CITI), "The latest move by the Government of India is seen as a strong and strategic response to this unilateral trade restriction by Bangladesh." He added that this policy shift would allow Indian exporters to redirect yarn to the domestic market and help fill the supply gap created by the curb on imports.

Santosh Katariya, President of the Clothing Manufacturers Association of India (CMAI), told TOI, "The decision is a timely step towards preventing the dumping of foreign-made garments and strengthening India's self-reliance in apparel production. At the same time, we believe this policy must be complemented with continued support for capacity building and ease of doing business for Indian manufacturers."

According to industry estimates cited by ET, Bangladeshi garments account for nearly 35 per cent of India's total apparel imports, even though overall imports contribute only 1–2 per cent of the country's consumption. The restriction is expected to particularly impact low-cost apparel such as T-shirts and denims, potentially leading to a 2–3 per cent price increase during the upcoming winter season due to disrupted supply chains and costlier ocean freight.

Prabhu Dhamodharan, convenor of the Indian Texpreneurs Federation, told ET, "With this move (ban on imports via land routes), the reduction in imports will help strengthen domestic production and support local manufacturers."

While the decision has been largely welcomed by Indian textile associations and small and medium enterprises (SMEs), it could temporarily disrupt supply chains of global brands and large-format retailers operating in India who rely on the speed and cost-efficiency of land-based imports. Experts say the policy may force a recalibration of sourcing strategies among companies, particularly during high-demand seasons.

The broader implication of this development is a recalibration of trade balances between India and Bangladesh, particularly in light of Bangladesh's recent transition from a Least Developed Country (LDC) to a lower-middle-income nation-a change expected to gradually phase out its preferential trade privileges.

As India pushes for greater self-sufficiency in its textile sector under the "Make in India" initiative, this move signals a tougher stance on trade asymmetries and opens a window for domestic players-if they can overcome existing cost and infrastructure constraints.