Rising import of manmade fibers from China has upset Ludhiana knit manufacturers as these imports attract low duty. After the implementation of GST, the import duty on manmade fibers has fallen from a cumulative 28.5 per cent (including basic customs duty, countervailing duty, special additional duty, education cess) to about 15.3 per cent (including basic customs duty, education cess and Integrated Goods and Service Tax). Thus imports have become cheaper by about 13.2 per cent.

In addition to this, China, which is a major exporter of manmade fibers to India, provides a drawback incentive of 18 per cent on manmade textile exports. Hence, manufacturers in Ludhiana want a higher import duty on manmade fiber textiles so that the domestic industry doesn’t suffer.

Ludhiana is a hub of knitwear industry and has around 5000 units with a majority of them in the medium and small scale sector. Ludhiana knitters have suggested imposing a dumping duty on import of manmade fibers as a step to protect the domestic industry. There is a gap in the import tariff structure wherein there is a specific duty on most types of fabrics. But there is no such specific duty in chapter 60 which comprises knitted fabrics.