Several clothing retailers in India, like Marks & Spencer and H&M, are struggling with inventory shortages. This issue stems from a recent government policy banning the import of ready-made garments from Bangladesh via land routes. With access limited to seaports in Kolkata and Mumbai, delays in sourcing merchandise have become common, especially for affordable fashion.
A senior executive at a global apparel brand shared that the effects of this policy change are becoming more noticeable. Bangladesh is the world’s second-largest garment exporter, making it a vital player for Indian brands, particularly in the budget segment.
In May, the Directorate General of Foreign Trade (DGFT) stopped imports of ready-made garments through land ports, leading to delays of two to three weeks in the supply chain. As retailers prepare for new collections and end-of-season sales, the shortfall in stock is increasingly visible.
To adapt, companies like Lifestyle and Reliance have started sourcing some of their production locally. Devarajan Iyer, CEO of Lifestyle International, acknowledged that while they are shifting more production to India, certain categories still rely on imports from Bangladesh. He emphasized the need for planning ahead to ensure steady supplies.
Rahul Mehta, chief mentor of the Clothing Manufacturers Association of India (CMAI), noted that shipping costs might increase prices by 3-5%. However, larger buyers who secured earlier contracts may not feel this impact right away. On the other hand, smaller traders, who often rely on quick, low-cost imports, are likely to face significant challenges because of this policy shift.
Data shows that imports from Bangladesh have decreased by 25% over the past year. In the first half of 2025, India imported $254.44 million worth of apparel from Bangladesh, which was a slight increase from $245.84 million the previous year, according to the International Trade Centre (ITC) and Confederation of Indian Textile Industry (CITI).
As the retail landscape evolves, the shift in sourcing strategies will shape the future of India’s garment market. While larger brands adapt, smaller players may struggle, raising questions about long-term sustainability in this competitive industry.
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