India’s import restrictions on Bangladesh to snag $770-800 million trade fabric 

Backdoor entry of Chinese fabrics into India (without duty) is also likely to get checked
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Import route restrictions imposed by India on key goods from Bangladesh on Saturday is likely to hit $770-800 million worth of annual imports from the neighbouring country, primarily of readymade garments, per sources.

“The measures are in response to Bangladesh’s recent imposition of restrictions on export of Indian yarn via land ports, restrictions on rice imports, and its continued imposition of port restrictions at Land Customs Stations (LCSs) and Integrated Check Posts (ICPs) bordering north-eastern (NE) States,” an official source said. 

Dhaka’s growing diplomatic tilt towards Beijing, reflected in Bangladesh’s interim chief adviser Muhammad Yunus’ recent invitation to China to establish an economic base in the country, while referring to north-eastern States in India as a land-locked region, also contributed to New Delhi’s latest measures against the country, another source added.

Duty-free imports

In 2024, Bangladesh’s goods exports touched $50 billion. Of this, readymade garments and home textiles accounted for $38 billion. Bangladesh is India’s biggest trading partner in the sub-continent. In FY24, India’s exports to Bangladesh stood at $11.06 billion while its imports were at $1.8 billion.

The import route restrictions imposed by the Directorate General of Foreign Trade (DGFT) on Bangladeshi items, including readymade garments, fruits, fruit-flavoured and carbonated drinks, processed food items, cotton and cotton yarn waste, plastic and PVC finished goods, and wooden furniture, cover more than 40 per cent of Bangladesh’s exports to India, accounting for about $770 million in value, according to a report by Global Trade Research Initiative (GTRI).

Domestic manufacturers of readymade garments stand to benefit the most from the restrictions as they have been long protesting against duty-free imports of items from Bangladesh which enjoy an unfair competitive edge owing to duty-free Chinese fabric imports and export subsidies. Per the DGFT notification, garments from Bangladesh will not be allowed from any land ports and can gain entry only from Nhava Sheva (Mumbai) and Kolkata seaports.

“Bangladesh exports about $700 million worth of readymade garments annually to India. It is hoped that this measure (import route restrictions), which is in direct response to Bangladesh hitting our yarn exports, will increase the opportunity available to Indian garment manufacturers to boost production for both local consumption and export. In all, about $800 million of imports may be hit,” the official said.

Unchecked entry of Chinese fabrics

Indian garment manufacturers can hope to replace at least ₹1,000-2,000 crore  ($117-234 million) of imports that were coming from Bangladesh annually, according to Sanjay Jain, Chair, ICC National Textiles Committee. 

“Buyers will be impacted as, temporarily, their supply chain will be disrupted and would have higher cost and lead time. They will need to re-align. For products with less differential in cost and quality, they will shift to Indian suppliers,” Jain told businessline.

Backdoor entry of Chinese fabrics into India (without duty) through Bangladesh, is also likely to get checked, Jain added. Chinese fabrics, if imported directly, from China have 20 per cent port duty.

The DGFT also restricted imports of fruits, fruit-flavoured and carbonated drinks, processed food items (baked goods, snacks, chips and confectionary), cotton and cotton yarn waste, plastic and PVC finished goods, and wooden furniture, disallowing them from any LCS/ICPs in Assam, Meghalaya, Tripura and Mizoram and LCS in Changrabandha and Fulbari in West Bengal.

“Port restrictions across all LCSs/ICPs in Assam, Meghalaya, Tripura and Mizoram on specified Bangladesh exports to India target those commodities that can be locally manufactured. Port restrictions have also been imposed on LCS Changrabanda and LCS Fulbari to avoid re-routing. The targeted list of items will be reviewed periodically to ensure that fair and equitable growth is facilitated in the respective north-eastern States in line with the Government of India’s schemes,” the official source said.

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Published on May 18, 2025