India’s imports of yarn, fabrics and made-up articles during December last year rose by 20 per cent over the figure in the same month in 2016, according to the ministry of commerce and industry. Apparel exports, however, dropped 0.3 per cent in April-December 2017 and 8 per cent in December, which is being attributed by some to duty drawback rates revision.
However, total export of textile and apparel rose by 2 per cent between April and December 2017 over the first nine months of 2016-17, a leading south Indian English-language daily reported.
The Confederation of Indian Textile Industry (CITI) sees this as a matter of concern as export data of Bangladesh showed India imported garments worth $111.3 million during July-December 2017 from Bangladesh, which was 66 per cent higher as against the same period of the previous year.
Imports of knitted apparel from Bangladesh were worth $20.6 million in July-December 2016 and rose to $36.5 million between July-December last year.
Cotton prices and yarn prices are going up in the domestic market and the government has reduced the duty drawback rates. After the implementation of the goods and services tax, exporters do not know yet what refund will they get on duties paid on exports.
CITI feels there was a need to impose safeguards such as rules of origin, yarn forward and fabric forward rules on nations like Bangladesh and Sri Lanka that had free trade agreements with India and China.
“Garment manufacturers in India have to pay duty on imported fabrics, while Bangladesh can import fabric from China duty-free, convert it into garments, and sell to India duty-free,” CITI chairman Sanjay Jain said in a statement.