Textile industry calls for imposing safeguard measures against cheap imports

The Dollar Business Bureau

Confederation of Indian Textile Industry (CITI), an apex textile industry body, on Monday called for imposing protection measures in order to prevent the routing of cheap fabrics from countries such as China through Sri Lanka and Bangladesh, where India has free trade agreements.

The garment industry in India will face tough competition from countries like Bangladesh as the garments imported from these countries are cheaper as the production cost is quite low compared to India, CITI said in a statement.

As per the recent data released by the Export Promotion Bureau of Bangladesh, India’s garments import from Bangladesh has touched $87.4 million during the period July to November this year, witnessing a steep rise of 56% compared to $55.92 million during the corresponding period last year, it stated.

Sanjay Kumar Jain, Chairman, CITI, said, “There is an urgent need to impose safeguard measures such as Rules of Origin, Yarn Forward and Fabric Forward Rules on the countries like Bangladesh and Sri Lanka that have free trade agreements (FTAs) with India to prevent cheaper fabrics produced from countries like China routed through these countries.”

“During July-November period, India’s knitted apparel imports from Bangladesh has surged by 69% whereas woven apparel imports increased by 51%, compared to the same period a year ago,” he said.

Jain pointed out that the basic custom duty is exempted on garments import from Bangladesh.

Before Goods and Services Tax (GST), garments import from Bangladesh was attracting cost of Rs.116 per piece (on an MRP of Rs.1,500 per piece)and Rs.77 per piece (on an MRP of Rs.999 per piece), in the form of countervailing duty (CVD) + education cess, thereon.

“However, after the GST implementation, garments import from Bangladesh attracts no cost,” he added.

“Garment manufacturers in India have to pay duty on imported fabrics, while Bangladesh can import fabric from China duty free and convert them into garments and sell to India duty free. This is putting Indian garment industry at a major disadvantage and it is feared that this figure will go up further in the coming days as more Indian Brands shift sourcing from India to low cost duty-free countries like Bangladesh and Sri Lanka,” the statement said.