Tirupur garment exporters are happy about the increase in basic customs duty from 10 to 20 per cent on specified garments. Duty hike on import of 23 knitted garment items and one knitted fabric is expected to help protect the domestic textile industry.
Knitwear exporters had been appealing for swift action in this regard as textile imports from countries such as China, Bangladesh, Vietnam and Cambodia have increased significantly. Textile imports grew at a CAGR of 17 per cent in the last five years and last year readymade garment imports increased by almost Rs 1,000 crores to Rs 4,983 crores in 2017-18 from Rs 3,994 crores in 2016-17.
Exporters say there is a need to restrict import of textile products. They have prepared a white paper detailing the threat from China, with Chinese companies setting up factories in countries bordering India to take advantage of labor, low wages and customs exemption available to these countries in EU and Canada.
Under the South Asian Free Trade Area (SAFTA) agreement, specified garment items imported into India from Bangladesh are also exempted. Exports of Tirupur in the last financial year have gone down by 5.6 per cent from the previous year.