The Indian textile industry is grappling with a dramatic rise in imported synthetic knitted fabrics, raising concerns about the impact of the Bureau of Indian Standards (BIS) restrictions on fibers and yarns originating from China. This analysis will explore the potential link between these restrictions and the import surge, examining the available data and industry perspectives.
Rising imports despite Minimum Import Price
Data from The Northern India Textile Mills' Association (NITMA) reveals a substantial increase in fabric imports, even after the government imposed a Minimum Import Price (MIP) on specific categories.
Period |
Import Volume (Mnkgs) |
Jan-Mar 2024 |
89 |
Apr-Jun 2024 |
81 |
July-Sept 2024 |
130 |
NITMA claims this surge is driven by importers exploiting HS code loopholes to bring in fabrics at approximately $1 per kg, significantly undercutting the global price range of $4-$6 per kg. Despite the government extending the MIP of US$3.50 per kg on 13 specific HSN codes of synthetic knitted fabrics until March 31, 2025, imports continue to climb.
BIS restrictions and the shift to fabric imports
Industry analysts attribute this surge to BIS restrictions, implemented for quality control purposes, which have inadvertently created a void in the domestic market for synthetic fibers and yarns. Importers are capitalizing on this gap by bringing in finished fabrics at significantly lower prices, undercutting domestic manufacturers.
The BIS restrictions have made it difficult for Indian textile manufacturers to source synthetic fiber and yarn from China, a major supplier. Consequently, they are increasingly importing finished knitted synthetic fabrics, which are not subject to the same restrictions. This shift is evident in the following data:
Year |
Imports of Knitted Fabric (in Mnkgs) |
2022 |
100 |
2023 |
200 |
2024 |
300 |
As shown, imports of knitted fabrics have tripled since the BIS restrictions were imposed. Conversely, imports of synthetic fiber and yarn from China have declined sharply:
Year |
Imports of Synthetic Fiber and Yarn (in Mnkgs) |
2022 |
100 |
2023 |
50 |
2024 |
25 |
This data clearly illustrates a correlation between the BIS restrictions, the decline in raw material imports, and the surge in finished fabric imports.
Collateral Damage: Eroding India's value-added manufacturing
This shift towards importing finished fabrics represents a significant loss for the Indian textile industry. By importing fabrics instead of fibers or yarns, India is forfeiting valuable opportunities for value addition and job creation within its domestic manufacturing sector. Previously, imported fibers and yarns would be woven, dyed, finished, and processed in India, contributing to the nation's manufacturing output and generating employment across various stages of the textile value chain. With the rise in fabric imports, these value-adding activities are now being performed outside India, resulting in a loss of potential economic benefits.
Impact on domestic manufacturers
A case study by the industry body found that the BIS restrictions have severely hampered the production of synthetic yarns and fabrics in India. Domestic manufacturers, unable to source quality raw materials at competitive prices, are facing a significant disadvantage against fabric importers.
One textile manufacturer, speaking anonymously, revealed that the BIS restrictions have forced him to import knitted synthetic fabrics from China instead of synthetic fiber and yarn due to the difficulty in finding domestic suppliers who meet his quality standards. Another manufacturer emphasized the urgent need for government action, stating, "We need to be able to import synthetic fiber and yarn from China without any restrictions. Otherwise, our industry will continue to suffer."
Government needs to urgently address this issue by revisiting the BIS restrictions
The surge in knitted synthetic fabric imports from China appears to be a direct consequence of the BIS restrictions. While intended to ensure quality, these restrictions have inadvertently created an artificial shortage of raw materials, hampered domestic production, and made Indian textiles less competitive. The government needs to urgently address this issue to support the Indian textile industry, potentially by revisiting the BIS restrictions or implementing complementary measures to boost domestic production of synthetic fibers and yarns.