In an attempt to limit rising textile products from foreign countries, especially from China, India has doubled import tax to 20 per cent on more than 300 textile products on Tuesday (7).
It was the second tax hike on textiles after an increase on other products including fibre and apparels last month.
The move is likely to provide a relief to the domestic textile industry, which has been hit by cheaper imports severely. India’s total textile imports moved up by 16 per cent to $ 7 billion in the last financial year, out of which, $3 billion imports were from China.
The Indian government is yet to disclose the details of the 328 textile outputs which are subject to rise in import duty announced.
India’s trade deficit with China in textile products touched a historic high of $1.54 billion in the financial year 2017-18 due to rising imports.This alarmed India’s textile industry offcials as the country was a net exporter of textile products to China until recent years.
According to market experts, India’s textile product imports could fall to $6 billion in the current financial year following a steep rise in import duty. India’s textile imports from Southeast Asian countries such as Vietnam, Cambodia, and others touched to their peak as they aren’t subjected to import duty under free trade agreements (FTA) signed by India with these nations. Newly imposed 20 per cent duty is not applicable to the products arrived from those countries which signed an agreement with India under FTA.
Meanwhile, Indian industry sources said, in the last many weeks, Chinese fiber has been shipped to Bangladesh and refined and exported to India without any import duty.
Market experts peg India’s textile and garment exports could climb 8 per cent to $40 billion in 2018-19 amid depreciating Indian rupee and since the government is expected to introduce incentives to boost foreign sales.
