India's textile industry to gain ₹1,000 crore business opportunity from Bangladesh trade restrictions | Explained

India has imposed restrictions on the import of a range of consumer items through many domestic land transit posts in the North East on Saturday, May 19, 2025. Kolkata and Nhava Sheva seaports will now be the only ports which will allow the import of Bangladeshi goods into India.

Experts say that the import restrictions slapped on Bangladesh are set to bring multi-crore business opportunities to the domestic textile industry to meet the demand in the local market. 

“Import of all kinds of readymade garments from Bangladesh shall not be allowed from any land port. However, it is allowed only through Nhava Sheva and Kolkata seaports,” the Commerce Ministry said in an official statement.

Imported fruits or fruit-flavoured and carbonated drinks, processed food items, cotton yarn waste, and plastic and PVC finished goods are among other items that are restricted from being imported into India through Assam, Meghalaya, Tripura, Mizoram, and West Bengal.

The Commerce Ministry also highlighted that the import of Fish, LPG, Edible Oil, and Crushed stone from Bangladesh will not be subject to restriction under the new mandate. 

India's trade with Bangladesh in 2025

According to Commerce and Industry data, India's exports to Bangladesh dropped 6.66% to $1.03 billion in February 2025, compared to its $1.11 billion level in February 2024.

India's total exports to the neighbouring nation in 2025, till the month ended February, also witnessed a 3.16 per cent drop to $2.09 billion, compared with $2.03 billion in the same period the previous year.

However, imports from Bangladesh witnessed a 10 per cent rise to $151.13 million in February 2025, compared to $137.35 million in the same month a year ago. The total imports till the month of February also recorded a 15.6% year-on-year (YoY) growth to $313.85 million, compared to its $271.32 million levels during the same period in 2024. 

According to the Ministry data release, the February data release is the latest, and the March and April data are still pending on the trade bank website.

Past year's data show bilateral trade between the two neighbouring nations was at $12.92 billion in the fiscal year ended 2023-24, compared to $14.24 billion in 2022-23, per a Mint report.

The FY2023-24 data highlights that Indian exports to Bangladesh were $11.07 billion, while imports were $1.85 billion.

Experts' Weigh In

Trade experts anticipate that Indian companies will benefit from the import restrictions due to the “cost advantage” factor, which will prevail due to the import duty on Chinese fabrics. Hence, importing from China will not be a suitable option, giving a boost to the Indian garment makers.

“Ready-made garments account for the majority of these imports, which will now face strict routing through only two Indian seaports. Indian textile companies are likely to be the key beneficiaries of these restrictions as Bangladeshi exports had a substantial cost advantage due to the use of duty-free Chinese fabrics. Other affected categories include fruit-flavoured carbonated drinks, processed foods, cotton and cotton yarn waste, plastic and PVC finished goods, and wooden furniture,” Sani Vishe, Research Analyst of Chemicals and Midcaps at Axis Securities, told Mint. 

Shreya Mehra, Research Analyst at Bonanza, expects that this import restriction through land ports will create over ₹1,000 crore of business opportunities for the Indian textile industry.

“India’s recent ban on garment imports from Bangladesh via land ports is expected to create an incremental business opportunity of over ₹1,000 crore for the domestic textile industry. While this move may lead to short-term supply disruptions for certain branded winter garments, resulting in a 2–3% price increase in categories such as t-shirts and denims, it will likely boost local manufacturing,” said Mehra.

The analyst also highlighted how India has historically imported garments worth ₹6,000 crore (approximately $722.37 million) annually from Bangladesh. Out of the ₹6,000 crore imports, India is equipped to cater to ₹1,000 to ₹2,000 crore of this demand through its domestic production.

“The supply chain impact on buyers will include increased lead times and higher costs in the short term, necessitating realignment. For products with minimal cost and quality differentials, sourcing is expected to shift to domestic suppliers,” said Mehra, emphasising how 35 per cent of India's total garment imports are from Bangladesh.

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