The Confederation of Indian Textile Industry has hailed the revision of customs duty on import of textiles goods. Countervailing duty and special additional duty applicable on imports have been abolished making imports cheaper by about 15 per cent. CITI says this has given the textile fabric industry a big relief as it was going through tremendous pressure post-GST regime and it will also help the industry to strengthen itself in the domestic as well as international markets.
The announcement is expected to help increase fresh FDIs especially in the fabric sector which will help the textile industry enhance its capacities to meet future challenges and opportunities arising in the domestic and foreign markets. The duty increase is mainly in manmade fiber-based fabric, which is a weak link in the country and needs a lot of investment to increase the Indian textile industry’s share in the manmade fiber category.
CITI hopes the problem of non-refunded GST on inputs for fabric manufacturers gets resolved at the earliest so that the disadvantage against imports is taken care of. However, there is a big issue of imports from FTA countries like Bangladesh and Sri Lanka where there is full exemption from basic customs duty. This is a gateway for Chinese fabrics entering India duty-free in the form of garments.