The Apparel Digest Report
India’s government is boosting its textile and apparel industry through investment incentives, PLI schemes, and export rebates, aiming to expand domestic production and modernize factories. Bangladesh also supports its sector, but its focus remains mostly on export cash incentives, which are smaller in scale and being phased down after LDC graduation. The contrast highlights India’s broader industrial push versus Bangladesh’s export-centric approach.
The global textile and apparel industry is in a new phase of competition. Countries want stronger domestic production and export growth. India and Bangladesh are among the biggest players. Their governments support the sector but in very different ways.
The apparel sectors of India and Bangladesh are characterized by a mix of fierce competition in global markets and deep supply chain interdependence, with Bangladesh acting as a dominant exporter of readymade garments (RMG) and India acting as a major supplier of raw materials like cotton and yarn.
Following political shifts in Bangladesh in August 2024, India experienced a 15–20% increase in inquiries for garment orders as brands sought to diversify risk, with 10–15% of short-term orders shifting from Bangladesh to India. However, Bangladesh retains a competitive edge in cost and scale, often holding a 15–20% price advantage due to lowr overhead cost.
The government of India has increased its support of textiles over the last few years. A major initiative is the Production Linked Incentive (PLI) scheme for textiles. The programme has an outlay of ₹10,683 crore and targets man‑made fibre (MMF) apparel, MMF fabrics and technical textiles. It incentivises firms to increase their output and create incremental turnover. It has changed the application window to March 31, 2026, in order to attract more investments.
As of early 2026, the scheme has received numerous proposals, including 84 projects planning roughly ₹10,789 crore in investment. Approved projects have already led to committed investments of around ₹28,711 crore (~$3.2 billion). They are expected to generate a projected turnover of over ₹2.16 trillion (~$24 billion) and create approximately 86,740 jobs.
The government has also increased export rebate schemes like RoDTEP. The programme covers some of the taxes and duties incurred by exporters. Over 10,000 product categories, including textiles, receive incentives ranging from 1% to 4% of product value. It was extended until March 2026 to help exporters stay competitive globally.
India’s Ministry of Textiles has seen increased budget support recently. In the 2025–26 fiscal year, the ministry received around ₹5,272 crore, up from previous years. This shows growing policy focus on both production and export competitiveness.
These measures reflect a broader industrial push. India is expanding domestic production, attracting investment, and moving toward higher-value segments such as technical textiles and MMF products. The policies support both factory modernization and export growth, giving companies a more secure long-term framework.
Bangladesh also supports its garment and textile sector, but the scope is narrower. The government provides cash incentives for exports, covering many product categories including apparel. Exporters receive assistance of 0.30% to 10% of shipped value depending on product type. RMG and textiles are the largest beneficiaries. The maximum incentive for RMG made from local yarn and sent to new markets is around 5.9%, though this has been reduced in recent years.
Bangladesh is phasing down some incentives ahead of its graduation from Least Developed Country (LDC) status in 2026. Some cash supports were reduced to around 0.3% in 2024, and a roadmap calls for further reductions.
The focus is therefore mostly on exports rather than expanding domestic capacity. While duty drawback schemes, tax rebates and bonded warehouse options exist, Bangladesh lacks large-scale investment programmes like India’s PLI or textile parks. This means less support for modernization and high-value production expansion.
The contrast is clear. India combines industrial promotion, investment incentives, and export support. Bangladesh relies primarily on export rebates and cash payouts, which are being reduced post-LDC graduation.
India’s strategy encourages firms to invest in capacity, diversify products, and compete globally with a stronger domestic base. Bangladesh’s system helps sustain exports but offers less long-term industrial support.
As global demand shifts and new markets emerge, these policy differences will shape the future of each country’s textile industry.
