From Zudio to Lifestyle, Fashion Retailers Face Inventory Crunch After Bangladesh Import Ban

Leading fashion retailers like Zudio, Lifestyle, and H&M are facing a significant inventory crunch after a ban on road imports of garments from Bangladesh, as per news reports. The sudden shift to seaport-only entries has created a 2-3 week delay in supply, impacting the flow of affordable fashion wear during peak sales season.

Retailers Grapple with Delays in Garment Supplies

Since May 17, 2025, India’s restriction on the road-based import of readymade garments from Bangladesh has caused inventory backlogs for several fashion chains. The Directorate General of Foreign Trade (DGFT) now permits garment imports only via Kolkata and Nhava Sheva seaports. Retailers are experiencing shortages in key product categories under ₹1,000, particularly in the fast-moving affordable fashion segment.

Bangladesh's Role in the Indian Fashion Supply Chain

Bangladesh, the world’s second-largest clothing exporter after China, plays a central role in India’s low-cost apparel market. Indian imports from Bangladesh touched $254.44 million between January and June 2025, indicating a 3.5% year-on-year rise. However, supply volumes have now shrunk by 25% due to policy changes affecting logistics routes.

Shift Towards Domestic Sourcing Underway

Major brands, including Reliance and Aditya Birla, have started to shift parts of their sourcing to Indian manufacturers. However, not all product segments can be produced locally at similar price points. Lifestyle International’s CEO confirmed a strategic shift to domestic supply but acknowledged ongoing delays for categories that are still reliant on imports from Bangladesh.

Read More: Central Government Extends Import Duty Exemption on Cotton till December 31, 2025; Textile Stocks in Spotlight!

Impact on Traders and Smaller Operators

While larger brands secured contracts in advance, smaller traders and grey market players are bearing the brunt of the disruption, as per news reports. These smaller entities depend on quick and cost-effective land routes that are no longer accessible. Additionally, the increase in shipping distance is estimated to bump up overall apparel costs by 3-5% due to higher freight charges.

Conclusion

The import ban on road freight from Bangladesh has disrupted the inventory pipeline of Indian fashion retailers, especially in the budget category. With a standard 2-3 week delay and 25% drop in imports, brands are making operational shifts to domestic alternatives, though at a potential cost increase. Retailers must swiftly adapt sourcing strategies to minimise long-term disruptions.

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