The restructuring of the Bangladesh textile sector, long one of the world’s most influential garment manufacturing ecosystems has moved far beyond a traditional rivalry between suppliers. What is unfolding instead is a deep and deliberate remapping of Bangladesh’s upstream fibre and fabric sourcing model, and the epicentre of that realignment is China. India, which for decades maintained a commanding presence in yarn supplies, is confronting a challenge that attacks its competitive foundation. In the space of just one year, China has transitioned from being the dominant supplier of synthetics and woven fabrics to becoming Bangladesh’s near-exclusive pipeline for cotton yarn as well. The relationship between the two countries has shifted so dramatically that India’s long-standing edge in yarn now appears newly vulnerable.

China’s embedding in Bangladesh’s textile core

A granular look at Bangladesh Trade and Tariff Commission (BTTC) data reveals the extent of China’s entrenchment. Today, over 80 per cent of Bangladesh’s textile and apparel supply chain is powered directly by Chinese raw materials, technology, or intermediate goods. Nowhere is this dominance more pronounced than in the woven and MMF-driven fabric segment the lifeblood of Bangladesh’s global RMG exports.

By 2024, China had already seized nearly four-fifths of Bangladesh’s total fabric imports, accounting for an extraordinary 78 per cent of inflows. This position was not merely a reflection of low pricing; it represented China’s structural superiority in scale, product diversity, high-performance MMF innovation, and its ability to offer specialty fabrics at speeds unmatched by any other country. For a manufacturing hub like Bangladesh, which relies almost entirely on imports for MMF yarns, technical fabrics, and performance synthetics, China has become more than a supplier it has evolved into a supply-chain enabler.

This near-monopoly reflects the culmination of China’s long-term strategy to dominate higher-value textile inputs. Bangladesh’s woven sector, which underpins the bulk of its over $47 billion RMG exports, is now fundamentally dependent on Chinese upstream capabilities. What was once a multipolar supply structure is turning into a Beijing-centred fibre-to-fabric fortress.

The unravelling of India's yarn dominance

For years, India held the commanding position in Bangladesh’s cotton yarn imports, supplying more than half of its requirements. This leadership rested on reliable quality, shorter transit time, cross-border transport efficiencies, and well-established relationships between Indian spinners and Bangladeshi knitwear units. In 2024, India accounted for 53.66 per cent of Bangladesh’s total yarn imports, giving it a substantial competitive foothold even as China’s fabric dominance grew.

But early 2025 altered the equation almost overnight. A series of trade and political tensions between India and Bangladesh, culminating in border closures and restrictions on land-port yarn shipments, created a vacuum that China filled with clinical speed. By January-February 2025, China had supplanted India outright, capturing 95.61 per cent of Bangladesh’s total yarn imports, while India’s share fell to negligible levels. This was not a marginal transition but a wholesale inversion of the previous year's landscape.

capability to scale up supply rapidly.

Table: India and China’s share in Bangladesh market

Source: Fibre2Fashion's TexPro, BTTC Data (Aggregated and projected figures)

The shift was equally dramatic in the fabric category. China’s already large 78.46 per cent market share in 2024 surged to an overwhelming 92.26 per cent in the early months of 2025. India, which previously held 8.47 per cent in fabrics, ceded virtually the entire space.

The table translates to a stark picture: China did not merely gain share; it assumed full control of both yarn and fabric supply chains simultaneously, across categories where India once held structural advantages.

In fabrics, China expanded from an already dominant 78 per cent in 2024 to over 92 per cent in the first two months of 2025, leaving India’s earlier 8 per cent footprint all but erased. In yarn, the segment traditionally led by India China’s rise from 37.5 per cent in 2024 to nearly 96 per cent in early 2025 reflects a takeover so complete that it redefines competitive baselines. India’s fall from 54 per cent to negligible in the same period underscores how geopolitical disruptions can swiftly cascade into supply-chain reconfigurations.

For India, the lesson is clear: market share built on cost parity and geographic convenience can collapse when policy friction intersects with an aggressive competitor’s willingness to scale up at speed.

Inside the industry shockwave

The ripple effects of Bangladesh's sourcing shift are being acutely felt by Indian textile majors, and Arvind Ltd provides a revealing lens into this disruption. As one of India’s largest integrated textile conglomerates spanning cotton yarn, denim, woven fabrics, and a growing MMF portfolio, Arvind has long benefited from Bangladesh’s proximity and its enormous appetite for Indian cotton yarn.

Arvind’s historical strength lay in premium cotton yarns and high-quality woven fabrics, backed by decades of brand equity and a reputation strengthened through its leadership in denim. Bangladesh, with its huge knitwear export engine, has been central to Arvind’s export volumes.

But the new sourcing realities present a structural challenge. The loss of yarn volumes to China threatens the company’s pricing power and utilization rates both crucial in a global market where spinning margins are already under pressure. Even though Arvind is actively investing in MMF and technical textiles, and shifting its portfolio toward higher-value segments, the immediate impact of losing a major export destination cannot be ignored.

Experts note that the Indian model built on cotton cost competitiveness no longer aligns with global textile evolution. China’s advantage now lies in integrated fibre-to-fabric ecosystems, where synthetics, functional materials, and technical textiles drive the premium end of global apparel. Arvind and its peers must therefore compete not on price alone but through product complexity, innovation, and value-added blends—categories in which China has raced ahead.

India’s counteroffensive

The near-total loss of yarn share has served as an inflection point for India’s textile strategy. Recognizing the depth of the challenge, the government is building a multi-phase roadmap aimed at restoring competitiveness and expanding India’s T&A exports from roughly $40 billion to $100 billion by 2030.

Much of this plan revolves around structural cost correction. Raw material prices, taxation layers, transportation inefficiencies, and power costs are under scrutiny as India works to level the playing field with both China and Bangladesh. Parallelly, India is fast-tracking FTAs with the EU and UK markets where Bangladesh currently enjoys duty-free access due to its LDC status, a benefit that will diminish as Bangladesh graduates in the coming years.

The cornerstone of India’s long-term strategy, however, is the shift toward MMF and technical textiles. Under the PLI scheme, India aims to build domestic capacity in these future-forward categories, reducing reliance on cotton-centric production and enabling the industry to join the global transition toward performance synthetics, recycled fibres, and engineered textile solutions.

This shift is essential not only for competitiveness but also for rebalancing India’s export portfolio. A diversified fibre mix will insulate the sector from cotton price volatility and ensure it competes in the same product spaces where China has achieved dominance.

A new vulnerability for Bangladesh

While China’s rapid expansion into Bangladesh’s textile inputs gives it unparalleled leverage, it also exposes Bangladesh to long-term risk. A supply chain over-concentrated in one country is inherently fragile. Any disruption, from geopolitical tension to freight escalation or environmental regulation could destabilize Bangladesh’s production pipeline.

For India, the moment calls for a decisive realignment. Rebuilding trust with Bangladesh, removing non-tariff obstacles, restoring multi-modal connectivity, and accelerating MMF investments are no longer optional. They are critical steps if India is to reclaim lost ground and transition from a cotton-dominated supplier to a future-ready textile power. Bangladesh’s shift has delivered a clear message to India: the global textile hierarchy is being reshaped not by costs alone but by speed, fibre innovation, and integrated ecosystems. China understood this early. India must now catch up fast.