In an effort to boost the textile industry, the government has doubled the import duty on more than 300 textile products. As a result imported garments, fabrics, specialised fabrics and carpets, among others, will become costlier, which would benefit domestic manufacturing.

According to a paper tabled in Parliament on Tuesday, the notification dated August 7 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.” This will become possible on amending Notification No. 82/2017-Customs dated 27.10.2017 under Section 159 of the Customs Act, 1962.

This is the second import duty hike after July this year, when the government had doubled the import duty on over 50 textile products, including jackets, suits and carpets to 20 per cent. The step was then seen as a move aimed at promoting domestic manufacturing.

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.

Imports of textile yarn, fabric and made-up articles grew by 8.58 per cent to $168.64 million in June. However, exports of cotton yarn/ fabric/ made-ups and handloom products grew by 24 per cent to $986.2 million. Exports of man-made yarn/ fabric/ made-ups grew 8.45 per cent to $403.4 million. Exports of all textile readymade garments dipped by 12.3 per cent to $13.5 billion.

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