Protect industry from cheaper fabric imports, urge manufacturers
Key players in India's fabric industry are pressing for urgent government intervention to safeguard the domestic market from a surge in cheaper fabric imports. As the Union Budget 2024-25 draws near, industry leaders are calling on Finance Minister Nirmala Sitharaman to introduce protective measures.
Without such safeguards, the industry fears a severe setback, hindering India's ambitious goal of achieving double-digit growth and realizing its 2030 and 2047 targets. The influx of cheaper fabrics from foreign markets is posing a significant challenge to domestic manufacturers, impacting their competitiveness and profitability.
Ashish Gujarati, Vice President, Southern Gujarat Chamber of Commerce and Industry (SGCCI) says, the a Minimum Import Price (MIP) on all types of fabric under various HSN codes should be imposed. He also highlights the need for excluding fabric and garments from free trade agreements (FTAs) with various countries, as the domestic industry is suffering from massive imports.
Gaurang Bhagat, President, Gujarat-based Maskati Cloth Market Association, points out, the domestic textile industry is in crisis due to cheap imports. The spinning, weaving/knitting, and dyeing and processing industries are suffering due to availability of finished fabrics at lower prices, he adds.
Industry representatives argue that these imports often involve dumping practices, where products are sold at below-market prices, unfairly undermining local businesses. They emphasize the need for a level playing field to ensure the growth and sustainability of the domestic fabric industry.
Subir Mukherjee, Business Head-Denim, Bhaskar Industries, recommends, cotton imports for fabric exports should be made duty-free to offset the impact on fabric exporters. Alternatively, the government could refund import duty to exporters, he adds. According to him, current schemes like duty drawback and RoDTEP (Remission of Duties and Taxes on Exported Products) do not sufficiently compensate for import duties on cotton. He also demands an increase in the RoDTEP value cap for chapter 5211 to match that of chapter 5209, as denim exports under chapter 5211 constitute over 40 per cent of India's total denim exports.
The specific measures sought by the industry include increased import duties, anti-dumping duties, and stricter quality standards for imported fabrics. They believe these steps will protect domestic manufacturers and create a conducive environment for investment and job creation in the sector. The industry's appeal has underscored the critical role of textiles in India's economy and the potential consequences of neglecting the sector's challenges.
