Ludhiana, the heart of India's garment industry, is facing a major threat from an influx of under-billed Chinese fabric. Textile manufacturers claim that Chinese polyester cloth, subject to a 25 per cent import duty, is being mislabeled as cotton and entering the market at a mere 5 per cent duty, resulting in a 20 per cent tax evasion. This "dumping" of cheap Chinese fabric is pushing Indian manufacturers into a corner, making it difficult for them to compete on price and raising fears of widespread job losses and business closures.

Tarun Jain Bawa, Chairman of the Bahadurke Textile and Knitwear Association and Federation of Textile and Manufacturing Association of Ludhiana, has accused the state government of inaction, questioning the involvement of customs officials in facilitating this mislabeling. Another manufacturer revealed that polyester fabric, priced at Rs 320 per kg, was being sold as cotton at Rs 80 per kg due to this practice, with an average of 500 containers carrying 22,000 kg each entering India every month.

The consequences of this situation could be dire for the Indian textile industry. Job losses, business closures, and increased dependence on China are just some of the potential outcomes. To address this crisis, stricter inspections, enforcement of import duties, anti-dumping measures, and support for domestic companies through subsidies and technology upgrades are being suggested.

The issue of under-billed Chinese cloth highlights the complex challenges of trade globalization and the need to balance global competition with the protection of domestic industries. Finding a solution that ensures fair competition while protecting Indian livelihoods requires collaboration between the government and stakeholders.