US retail behemoth Gap Inc is reportedly reducing its shipments from the Indian subcontinent countries of India, Sri Lanka and Bangladesh.

The clothing chain could be planning to lower its sourcing from these markets from US$1bn to $700-750m, Indian paper the Economic Times reported citing local sources.

Gap was not immediately available for comment, but later said that talk of a scale-back was incorrect and speculative.

It is believed that other top retailers could also scale back orders, partly due to the appreciating rupee and weakening dollar.

Gap faced up to allegations that one of its subcontractors in India was using child labour last month, vowing to end its work with the manufacturer involved and not sell the associated products.

Marka Hansen, president of Gap North America, said in a statement at the time: "We strictly prohibit the use of child labour. This is a non-negotiable for us - and we are deeply concerned and upset by this allegation."