While the domestic apparel manufacturing industry is upset with the Indian government's move to allow duty-free import of more textile products from Bangladesh, it has spiked interest among garment retailers.

For the last few years, 17 textile and readymade goods, including woven tops and bottoms, have been allowed to be imported to India, duty-free. This basket has now been expanded to 48 items, including T-shirts and knit-wear which could not be imported earlier.

Ms Rachna Aggarwal, CEO, Indus League, says, “Currently, less than 10 per cent of our sourcing is from Bangladesh. With the new notification, we will look at increasing our business with Bangladesh.”

Indus League sources denims, cargos, shirts and trousers from Bangladesh.

Indian Terrain, which manufactures products in-house and sources from vendors in Chennai and Bangalore, is exploring the possibility of sourcing woven casual shirts, pants and, “maybe even” T-shirts, from Bangladesh.

According to Mr Charath Narsimhan, CEO, Indian Terrain, labour in Bangladesh is 25 per cent cheaper than in India. Considering all other costs, on an end-to-end basis, products made in Bangladesh are 15 per cent cheaper than Indian products.

Even with freight charges, it is still financially viable to source from Bangladesh, says Ms Aggarwal.

Quality issues

Earlier, Bangladesh was known as a low-cost destination; today it has stepped up in variety, fashion and quality, says Mr Narsimhan, “with several factories supplying to premium brands in Europe and the US.”

Mr Narsimhan will soon visit Bangladesh to assess the opportunities there and meet up with potential partners.

Currently, only 10 million pieces can be imported from Bangladesh every year (the cap was 7 million two years back). “The benefits can be fully achieved only if the cap is further expanded,” says Mr Narsimhan. “The Bangladesh government has requested the Indian government to expand it to 15 million.”

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