India’s ban on imports from Bangladesh through the land ports could generate an additional business of more than ₹1,000 crore for the domestic textile industry, said industry experts. However, certain branded garments may see some supply issues in the winter season, which could raise prices of items like T-shirts and denims 2-3%.
The director general of foreign trade (DGFT) in a notification on Saturday banned imports of garments and several other products from Bangladesh through land routes, but allowed them to be shipped in via Kolkata and Nhava Sheva ports.
The local industry had been demanding restrictions on imports, concerned about a double-digit growth in textile imports from Bangladesh due to zero import duty.
The move is also expected to curb the back-door import of Chinese fabric, which otherwise attracts 20% import duty.
The trade and industry unanimously think that Bangladesh will lose more than India due to change in the import policy.
“India is not going to lose much… It will be difficult for Bangladesh to import by sea route through containers over the land route, which took a couple of days,” said Bimal Bengani, chairman (eastern region) at Federation of Indian Export Organisations (FIEO).
Boost Local Manufacturing: The ban on land route imports from Bangladesh may boost local manufacturing, industry insiders said.
“We were importing garments worth ₹6,000 crore annually from Bangladesh. We can now expect imports worth ₹1,000-2,000 crore to be replaced with Indian manufacturing,” said Sanjay K Jain, chairman of National Textile Committee, Indian Chamber of Commerce (ICC).
Indian companies have been importing woven and knitted apparel from Bangladesh due to the zero-duty advantage.
“With this move (ban on imports via land routes), the reduction in imports will help strengthen domestic production and support local manufacturers,” said Prabhu Dhamodharan, convenor of Indian Texpreneurs Federation, which represents the entire value chain of the textile industry.
According to industry estimates, India meets between 1-2% of its apparel consumption through imports, while Bangladesh accounts for about 35% of total garment imports in the country.
“This move would also reduce the backdoor entry of Chinese fabrics into India (without duty) that were getting converted in Bangladesh and being sent to India duty free,” Jain said.
Supply Disruption: All the leading Indian brands as well as the global brands present in India source between 20% and 60% garments from Bangladesh, according to industry estimates.
The supply chains of these brands and many MSME units are expected to be disturbed in the short term.
“Buyers will be impacted as temporarily their supply chain will be disrupted and would have higher cost and lead time,” Jain said.
