India's fabric industry hit by rising Chinese imports.

India's textile hub is facing stiff competition from China, with fabric imports rising 8.8 per cent in the first quarter of 2024. This rise coincides with India's implementation of Quality Control Orders (QCOs) on raw materials like yarn.

Industry leaders, including Ashish Gujarat of the Southern Gujarat Chamber of Commerce and Industry (SGCCI), attribute this increase to India's Quality Control Orders (QCO) on raw materials like yarns. Gujarat highlighted that these QCOs inadvertently favor Chinese exporters by allowing them to offer competitively priced fabrics, undermining India’s domestic textile sector. He advocates for extending QCOs to finished fabrics to protect local manufacturers.

Chinese fabric exports to India reached $442.8 million in the first quarter, up from $407 million last year. Meanwhile, yarn imports from China significantly declined by 43 per cent. This suggests Chinese manufacturers are focusing on finished fabrics, potentially to exploit a loophole in India's QCO system.

Indian industry leaders are urging the government to impose QCOs on fabrics as well. They argue this will level the playing field and protect domestic producers from cheaper Chinese imports.

The rise in fabric imports reflects a larger struggle for India's textile sector. Indian fabric and apparel exports are lagging behind smaller competitors, highlighting the need for strategic interventions. Industry leaders believe QCOs on fabrics are crucial to prevent market disruption and support the growth of Indian manufacturers.