Domestic garment makers hope for better days with curb on imports

The Hindu

20-05-2025

With India restricting import of readymade garments from Bangladesh through land ports, domestic garment manufacturers hope to see revival in orders. In a notification issued on May 17, the Director General of Foreign Trade (DGFT) said readymade garments can be imported from Bangladesh only through Nhava Sheva and Kolkata ports.
'Dealers in northern States were able to get hold of cheap imported garments that cost almost 20% lesser than Tiruppur products. The situation worsened in the last 2-3 years,' said S. Balachandar, vice-president of the South India Hosiery Manufacturers Association.
'Now, the garments can be brought in only through sea ports. This will reduce the illegal entry of ready-made garments. The undergarments made in Tiruppur will be competitive cost-wise with the goods coming by sea. In a couple of months, we hope to see orders increasing for MSMEs in Tiruppur,' he said. Imports of low-priced garments in huge quantities will certainly reduce now, he said.
The Confederation of Indian Textile Industry (CITI), quoting trade data, said India imported readymade garments worth $634 million in 2024, which saw 19% CAGR growth in the last 10 years. Total textile and apparel exports from India to Bangladesh in 2024 were $3.2 billion and exports from Bangladesh to India were $1.07 billion. Though India has a trade surplus with Bangladesh in textiles and apparel, its exports grew 4.97% (CAGR) between 2015 and 2024, while Bangladesh's exports to India grew 12.87%.
Garments worth ₹5,000 crore to ₹6,000 crore are imported by India from Bangladesh annually, including those by the unorganised sector. 'The DGFT decision will reduce the backdoor entry of Chinese fabrics that were getting converted in Bangladesh and entering India without duty,' said Sanjay Jain, chairman of the National Committee of Experts for Textiles, Indian Chamber of Commerce.
Rahul Mehta, chief mentor of Cloth Manufacturers Association of India, said Bangladesh imports cost 12-15% less compared with Indian products. These imports will now shift to sea ports, escalating the cost by almost 10% and increasing the delivery time. This is likely to make Indian buyers look to domestic suppliers, he said.
However, industry representatives point out that a majority of the imports is by retail chains. It remains to be seen how buyers will react to the restriction.
According to Mithileshwar Thakur, Secretary General of AEPC, restrictions on garment imports from Bangladesh will disrupt the supply chain in the short term. However, since most of the imports are by large retailers, the long-term impact will depend on how effective the sea trade is. For low or medium-volume imports, land ports will be preferred.
Rakesh Mehra, chairman of the Confederation, said the DGFT decision will create new opportunities for domestic garment manufacturers. It will also enable Indian cotton yarn exporters to redirect their supply to the domestic market. Bangladesh imposed a restriction last month on export of cotton yarn from India, which traditionally accounts for nearly 45% of India's total cotton yarn exports, he said.
Industry sources said the retail chains in India import manmade fibre (MMF) garments mainly from Bangladesh, China, and Vietnam. Readymade garments from Bangladesh continue to enjoy zero duty access in India, giving the imports a cost advantage. The government should ban import of garments from China and review the duty free access for Bangladesh garments so that the domestic textile chain revives, they said.