India's textile industry pushes for extension of minimum import price (MIP) on knitted fabrics.
In order to safeguard domestic interests, India's textile industry is intensifying its call for an extension of the Minimum Import Price (MIP) across all Harmonized System (HS) lines under Chapter 60. This chapter encompasses various types of knitted and crocheted fabrics, a crucial segment for the country's textile sector.
The current MIP, set to expire on September 15, 2024, covers only five specific HS lines. However, stakeholders argue this limited scope has not effectively curbed imports, as overall knitted fabric imports have persisted unabated. Concerns have been raised about the adverse impact of fabric dumping, which has undercut local prices and stifled market opportunities for domestic manufacturers.
R K Vij, Emeritus President of the Textile Association of India (TAI) and Secretary General of the Polyester Textile and Apparel Industry Association (PTAIA), explains, the imposition of MIP on selective HS lines did not deter imports, as fabric inflows surged through other HS categories within Chapter 60. The industry consensus strongly favors extending MIP protections across the entire chapter to stem this influx.
The Confederation of Indian Textile Industry (CITI) too points out in a communication to the Ministry of Textiles, there has been an increase in imports under alternative HSN codes since the introduction of the current MIP structure. Import data from April to June 2024 revealed a marked increase compared to the same period in 2023, underscoring the urgency for broader MIP coverage.
Critics say that a uniform duty structure previously allowed substantial fabric imports under Chapter 6006, which could have been classified differently. They argue current import prices, particularly for categories under HSN 6001 and 6005, render domestic production economically unfeasible, exacerbating challenges faced by local textile manufacturers.
Various industry bodies like the North India Textile Mills Association (NITMA), Southern India Mills Association (SIMA), Federation of Surat Textile Traders Association, and Punjab Dyers Association—have rallied behind calls for comprehensive MIP extension. These organizations stress the need for immediate government action to protect domestic markets from excessive fabric dumping, especially amidst sluggish global demand from developed economies.
As stakeholders await a decision from the Ministry of Textiles, the industry remains steadfast in its appeal for extended MIP coverage beyond September 15, 2024, encompassing all knitted fabric categories under HSN codes 6001, 6002, 6003, 6004, and 6005. This move, proponents argue, is essential to bolstering India's textile sector's resilience and ensuring a level playing field in the face of international market dynamics.