Import Ban Falls, Fashion Frays: Why Zudio, Lifestyle & More Face Severe Inventory Crunch

Nearly three months since the Indian government banned road imports of ready-made garments from Bangladesh, major fashion retailers such as Zudio, Lifestyle, H&M, and Marks & Spencer are grappling with severe inventory shortages. The halt on land-based shipments has upended supply chains across the affordable fashion sector, creating visible stockouts even amid end-of-season sales and collection refresh efforts.

Ban Rattles Road Imports — Seaport Delays Intensify

On May 17, the Directorate General of Foreign Trade (DGFT) issued a directive prohibiting imports of garments from Bangladesh through land entry points. Instead, all shipments must now transit via major seaports—specifically Kolkata and Nhava Sheva. While seemingly a minor routing change, this policy shift has delayed shipments by 2–3 weeks on average, as importers adapt to longer logistic cycles and port handling times.

Affordable Fashion Takes the Biggest Hit

Bangladesh is the world’s second-largest garment exporter after China and has long supplied affordable, trend-forward clothing to Indian brands. The impact of the ban is especially acute in value-oriented segments—garments priced below ₹1,000, which are highly dependent on swift, low-cost procurement from Bangladesh.

According to industry insiders, readymade garment imports from Bangladesh have dropped by as much as 25% year-on-year. Retailers that rely on those high-turnover, budget-friendly collections are now forced to recalibrate stock levels amidst rising demand volatility.

Stockouts Amid End-of-Season Sales and New Collections

The crunch is especially noticeable at Lifesytle’s stores and similar outlets as they juggle end-of-season clearances with the launch of fall assortments. “We have shifted some sourcing domestically,” said the CEO of Lifestyle International, “but categories still tied to Bangladesh shipments remain delayed.” This juggling act is placing pressure on sales forecasts and customer satisfaction.

Cost Pressures Building — Domestic Sourcing on the Rise

To mitigate short-term disruptions, retailers have begun diversifying sourcing toward domestic suppliers. However, this has increased costs by 3–5%, as confirmed by apparel sourcing experts. Although prior contracts and advanced planning are helping buffer larger chains, smaller retailers—especially those dependent on quick, low-cost imports—face sharper revenue and stock challenges.

Impact on Smaller Merchants and the Grey Market

While big chains may weather the storm, smaller traders and grey market sellers are feeling the impact. With limited access to seaport-imported stock and fewer alternatives in domestic manufacturing, many such merchants are reporting diminishing inventory levels and disrupted supply flows, further squeezing already tight margins.

Economic Stakes and Broader Retail Impacts

Economists estimate that India imported nearly $254 million worth of apparel from Bangladesh during January–June 2025, a marginal increase from the previous year. Yet, this increase masks the turmoil beneath: disrupted replenishment cycles, increased shipping costs, and shifting consumer behavior favoring ready availability.

For the fashion industry, this policy shift is more than a logistic hiccup—it is a test of resilience. Brands must now balance consumer demand for trend-driven affordability with supply chain agility, all while managing rising costs and eroded margins.

Editorial Perspective

This inventory crisis reveals deeper dependencies in Indian retail’s sourcing model. While the import ban aims to protect economic sovereignty, its ripple effects underscore the need for diversified manufacturing strategies and stronger domestic textiles infrastructure. For brands like Zudio and Lifestyle, this moment is both a supply chain challenge and an opportunity—to innovate resilience, reconfigure sourcing, and emerge stronger post-disruption.