Ban of RMG imports from Bangladesh causes inventory crunch for fashion retailers

04 September 2025, Mumbai 

Since May 17, 2025, India has banned the import of readymade garments from Bangladesh through its land ports. The Directorate General of Foreign Trade (DGFT) has restricted these imports to only two seaports; Kolkata and Nhava Sheva (Mumbai). This policy change has caused a significant inventory crunch for many Indian fashion retailers, including major brands like Zudio, Lifestyle, H&M, and Marks & Spencer.

The shift from fast land routes to slower sea routes has caused delays of 2-3 weeks in merchandise sourcing, particularly for lower-priced fashion items. This has become more visible as retailers are now stocking fresh collections for the upcoming festive season while managing end-of-season sales.

Major brands like Lifestyle, Reliance, and Aditya Birla have begun shifting some of their production to domestic manufacturers to mitigate the impact. However, some product categories that were heavily sourced from Bangladesh are still experiencing delays. Smaller traders and grey market operators, who rely on quick and low-cost supplies, are the most affected.

The new policy is expected to raise import costs by 3-5 per cent due to higher shipping expenses. While larger retailers may be able to absorb this in the short term, the pressure is mounting.

According to industry data, garment imports from Bangladesh have declined by about 25 per cent Y-o-Y. This comes despite a slight increase in the total value of apparel imports from Bangladesh in the first half of 2025 compared to the same period in the previous year.

The DGFT directive is reportedly a ‘retaliatory move’ by the Indian government amidst growing political tensions with Bangladesh's interim administration. The ban followed remarks by Muhammad Yunus, Chief Advisor, Bangladesh and comes as India faces its own challenges, including a 50 per cent tariff on its garment exports to the United States.

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