Comments
The government has doubled the import duty on textile products — for the second time in a month — a move that is expected to further incentivise the domestic industry.
A notification to increase the Customs duty on 328 tariff lines of textile products from 10 per cent currently to 20 per cent was made public on Tuesday. As a consequence, imported garment, fabrics, specialised fabrics and carpet, among others, will become costlier. Higher duty will be applicable on shirt, trousers, coat, blazer, kids garments, lingerie etc.
This amends the notification dated October 27, 2017, under Section 159 of the Customs Act, 1962.
In July this year, the government had doubled the import duty on over 50 textile products, including jackets, suits and carpets, to 20 per cent.
The government expects that the higher duty will help the industry, which employs nearly 10.5 crore and has been facing stiff competition from cheaper imports.
May hit China
India is bound to provide concessional tariff for least developed countries such as Bangladesh, but there is no such provision in respect of imports from China. This means the higher duty will help curb cheaper imports from China. Since India cannot give any direct incentive to the domestic manufacturing, hiking tariffs is the only available option. Imports of textile yarn, fabric, made-up articles grew 8.58 per cent to $168.64 million in June. However, exports of cotton yarn/fabrics/made-ups, handloom products grew 24 per cent to $986.2 million. Man-made yarn/fabrics/made-ups exports rose 8.45 per cent to $403.4 million. Exports of all textile readymade garments dipped by 12.3 per cent to $13.5 billion.
Industry hails move
The textile industry termed the government’s decision as a “protective measure”.
“This decision will help the entire textile sector revive,” said A Sakthivel, Regional Chairman, FIEO. Due to tough competition from Vietnam, Sri Lanka and Bangladesh, garment exports took a huge hit and continued to slip. This, coupled with issues such as the delay in GST refund and the truckers’ strike, added to the industry’s woes and made their products more expensive.
Many of the units began to ease up on their capacity utilisation levels, which further increased the production cost. Above all, the significant rise in the import of fashion wear posed a big challenge to the garment exporting units, Sakthivel said.
Industry sources, however, said that it was too early to respond to the government’s move in the absence of clarity about the list of items on which the import duty hike has been effected. “We hear that there has been no increase in the Customs duty on fibre. If this is true, we welcome the move,” said the Managing Director of a local spinning mill.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.