India's fashion retailers face shortages as Bangladesh import curbs bite

Marks & Spencer, H&M, Zudio, and Lifestyle hit by delays after DGFT restricts garment imports to Kolkata, Nhava Sheva ports

Nearly three months after India banned the import of readymade garments from Bangladesh through land routes, leading fashion retailers in India, including Marks & Spencer, H&M, Zudio, and Lifestyle, are facing merchandise shortages in their stores, according to a report by The Economic Times.

 

The policy, implemented on May 17, 2025, by the Directorate General of Foreign Trade (DGFT), restricts the import of garments from Bangladesh to Kolkata and Nhava Sheva (Mumbai) seaports only. Previously, goods entered primarily through land ports, which facilitated faster turnaround. The shift has caused delays of two to three weeks in replenishment, particularly in the affordable fashion segment. The impact is now more evident as retailers stock fresh collections alongside end-of-season sales.

   

As a result, garment imports from Bangladesh have already fallen by about 25 per cent year-on-year, mainly affecting items priced below ₹1,000.

 

Festive season impact

The timing of these supply disruptions is especially sensitive, as they come just ahead of India’s peak festive shopping season from September to November. This period, which covers major festivals including Diwali, Durga Puja, Navratri, Karva Chauth, and more, is when apparel demand typically surges, with retailers relying on a steady flow of fresh merchandise to drive sales.

 

Bangladesh: A key supplier for India’s fashion retail

Bangladesh, the world’s second-largest garment exporter after China, supplies a significant share of affordable apparel to Indian retailers. According to the Confederation of Indian Textile Industry (CITI), as reported by The Hindu, India imported garments worth ₹5,000-₹6,000 crore annually from Bangladesh, much of it for mass-market retail.

 

India imported $254.44 million worth of apparel from Bangladesh between January and June 2025, up 3.5 per cent from a year earlier, data from the International Trade Centre (ITC) and CITI show. In 2024, imports stood at $634 million, registering a 19 per cent compound annual growth rate (CAGR) over the last decade.

 

Although some sourcing has shifted within India, several categories previously imported from Bangladesh are experiencing delays due to the new import rules.

 

Smaller traders face sharp cost pressures

The restriction is expected to raise sourcing costs by 3-5 per cent, driven by higher shipping charges, according to the Clothing Manufacturers Association of India (CMAI), The Economic Times reported. 

However, the effect on larger retailers may be limited in the short term as many had placed advance orders. Careful planning will be required to maintain steady supplies and minimise disruptions to sales. 

Smaller traders and grey-market operators, who relied on low-cost and quick deliveries from Bangladesh, are likely to bear the heaviest impact.

 

Why did India restrict Bangladeshi imports?

Although the DGFT notification did not explicitly cite the reason behind the curbs on garment imports, the August measures followed remarks by Bangladesh’s interim leader, Muhammad Yunus, during a visit to China. Yunus had described India’s northeastern states as landlocked and highlighted Bangladesh’s role as their access point to the sea, presenting this as a potential advantage for expanding Chinese economic engagement in the region. 

These remarks drew sharp criticism from Indian political leaders across party lines, who saw them as provocative and damaging to regional trust. 

Tensions between the two nations flared after former Prime Minister Sheikh Hasina fled to India on August 5, 2024. Relations have also come under strain as New Delhi repeatedly expressed concern over Dhaka’s handling of attacks on minority communities, particularly Hindus.

 

Yet economic engagement between the two countries remains significant. Bilateral trade stood at $12.9 billion in 2023-24, with India’s exports to Bangladesh reaching $11.46 billion so far in 2024-25, while imports have amounted to $2 billion.

 

Meanwhile, India’s own readymade garment industry is facing setbacks after US President Donald Trump imposed 50 per cent tariffs on New Delhi.