Import duty on 328 textile products doubled
Taking one more step for the domestic textile industry, the Government has doubled import duty on 328 textile products...
Taking one more step for the domestic textile industry, the Government has doubled import duty on 328 textile products. A notification to this effect was tabled by Minister of State for Finance Pon Radhakrishnan in the Lok Sabha. The notification seeks ‘to increase the customs duty on 328 tariff lines of textile products from the existing rate of 10 per cent to 20 per cent’.
The Government expects that higher duty will help the industry, which employs nearly 10.5 crore people. The industry is facing a tough challenge from cheaper imports. Now, the problem is that India is bound to provide concessional tariff to the least developed countries such as Bangladesh, but there is no such bar on imports from China. This means higher duty will help curb cheaper imports from countries such as China. Also, since India cannot give any direct incentive to domestic manufacturing, hiking tariffs is the easily available option, which the Government has exercised now.
The industry has still to do the detailed analysis of this decision, however, it is hopeful that revision in import duty has covered MMF Spun Yarn and MMF based fabrics as huge surge of imports have been witnessed in these categories post GST which is impacting yarn and fabric manufacturers in a big way. Sanjay K Jain, Chairman, CITI has welcomed this decision and thanked the Government for the same.
The decision does not positively impact the issue of imports from Bangladesh where there is a full exemption of Basic Customs Duty (BCD) and hence Chinese fabric is easily coming to India duty-free through Bangladesh in the form of Garments. Until and unless Government intervenes and puts a Rule of Origin clause, imports from Bangladesh will keep coming at the same pace and would affect the fabric as well as other segments of the value chain. In the last one year, the imports of apparel from Bangladesh have increased 44 per cent from US $ 140 million in 2016-17 to US $ 201 million in 2017-18.
Imports of textile yarn, fabric and made-up articles grew by 8.58 per cent to US $ 168.64 million in June. However, exports of cotton yarn/ fabric/ made-ups and handloom products grew by 24 per cent to US $ 986.2 million. Exports of man-made yarn/ fabric/ madeups grew 8.45 per cent to US $ 403.4 million. Exports of all textile readymade garments dipped by 12.3 per cent to US $ 13.5 billion.