China is exporting textiles to India through Bangladesh, undermining India’s efforts to support local manufacturers. Textile raw material from China comes to India via Bangladesh, which has a free-trade agreement with India. Duty free fabric from China goes to Bangladesh, gets converted and lands into India at zero duty.

Trade bodies, which expect textile imports from Bangladesh to rise further, want India to introduce a rule of origin for duty free imports. Competition from China is forcing some businesses, such as polyester production facilities, to run idle, leading to job losses.

Import of clothing accessories and apparel from Bangladesh -- the world's second largest exporter of readymade garments -- rose over 43 per cent during the year ended March 2018. And almost 50 per cent of the garments were made with Chinese fiber.

This development is ironic considering that India until recently had been a net exporter of textile products to China. India, Bangladesh and Sri Lanka are among the signatories of the South Asian Free Trade Agreement (SAFTA) that created a free trade zone in the South Asian region. Under this, only those goods should be exempt from custom duty whose raw material is also manufactured by one of the SAFTA countries. And China clearly isn’t.