Textile imports increase 19.7% on surge in Bangladesh shipments

Coimbatore: Even as textile exports continue to advance at a slow pace, imports have increased on the back of a sharp surge in shipments from Bangladesh. Textile imports grew 19.7% year-on-year to around $1.4 billion between April and December 2017 while exports went up by a measly 2% y-o-y to $26.1 billion for the timeframe.

India’s imports of garments from Bangladesh increased 66% y-o-y to $111.3 million during July-December 2017, according to the latest statistics released by Export Promotion Bureau of Bangladesh. While knitted apparel imports from Bangladesh soared 77% y-o-y to $36.5 million between July and December 2017, woven apparel imports grew 62% y-o-y to $74.8 million.

“It (imports) is negatively affecting the domestic yarn, fabric and garment manufacturers,” said Sanjay K Jain, chairman, Confederation of Indian Textile Industry (CITI). “There is a greater need to impose safeguard measures such as rules of origin, yarn forward and fabric forward rules on countries like Bangladesh and Sri Lanka that have FTAs (free trade agreements) with India to prevent cheaper fabrics produced from countries like China routed through these countries,” he said.

Garment manufacturers in India have to pay duty on imported fabrics, while Bangladesh can import fabric from China duty free and convert them into garments and sell to India duty free. This has put the garment industry in a spot.

“India can increase its exports of cotton yarn and fabrics provided the sector is restored with export incentives,” the CITI chairman stated. “India’s share of cotton yarn in world trade is 26% and it is declining steeply as the incentives given to the cotton yarn sector were withdrawn in 2014 and MEIS (Merchandise Exports from India Scheme) which was extended to the entire value chain was not extended to cotton yarn,” he said.

“Moreover, there are various state levies up to the tune of 8% on cotton yarn which are not refunded at any stage,” Jain pointed out. “Similarly, fabric sector is not getting refund of state levies of around 6%. By including cotton yarn under MEIS and providing ROSL (refund of state levies) for fabrics, Indian can retain its competitiveness in the global market,” he said.