Import duty on textiles products won’t hurt B’desh shipments


Coimbatore: Though the union government’s decision to double import duty on 328 textile products has brought relief to the textile industry, the move would not impact shipments from Bangladesh, the primary source for the increase in garment imports into the country, industry officials said. “The decision does not positively impact the issue of imports from Bangladesh since there is a full exemption of ‘Basic Customs Duty’,” said Sanjay Jain, chairman, Confederation of Indian Textile Industry (CITI). Chinese fabric is easily coming to India ‘duty free’ through Bangladesh in the form of garments, he said. “Until and unless the government intervenes and puts a ‘Rule of Origin’ clause, imports from Bangladesh will keep coming in the same pace and would affect the fabric as well as other segments of the value chain,” Jain stated.

There has been a continuous rise in imports of textile products, especially after the implementation of GST (Goods and Services Tax) last July. Imports of apparel from Bangladesh has surged 44% year-on-year (y-o-y) to $201 million in 2017-18. India imported textile and apparel products valued at about $7 billion in 2017-18, a 16% year-on-year increase.


Industry officials said that Bangladesh imports Chinese fabric, converts them into garments using its cheap labour and exports them to India without paying any duties. Since import of ‘Made in China’ fabrics is meant for exports, Bangladesh doesn’t impose any import duties either. Some specified garment items imported into India from Bangladesh are exempted under the SAFTA South Asian Free Trade Area.


In the pre-GST era, import of garments from Bangladesh was attracting Rs 77 per piece (where MRP is Rs 999 per piece) in duties and Rs 116/pc (where MRP is Rs 1,500/pc) in the shape of CVD (countervailing duty) plus education cess and thereon. However, in the post-GST scenario, there was no cost for import of garments from Bangladesh.


Several industry associations have been continuously making representations to the government citing the vulnerability of the Indian textile industry and the serious threat to employment caused by imports. The government should consider imposition of safeguard measures including yarn forwarding rules and fabric forwarding rules on countries that have FTAs (free trade agreements) with India to prevent cheaper fabrics produced from countries like China routed through these countries, CITI said.



Source: The Times Of India, India
Thursday, 09 August 2018

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