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CITI unhappy with increase in import of textiles and clothing

Post the release of foreign trade data for December 2017 by the Ministry of Commerce & Industry, Sanjay Kumar Jain, CITI, Chairman, has expressed apprehension over the 3 per cent fall in CAGR in textiles and apparel exports as against the corresponding period of December 2016. Textiles and apparel exports were $2996 million in December 2017 when compared to $3075 million a year ago. However, the cumulative export has slightly improved by 2 per cent CAGR as exports recorded $26,136 million in April-December 2017 as against $25,721 million in April-December 2016.

Jain noted the share of textiles and apparel exports in the All Commodity Exports (ACE) also fell by 2 per cent in December 2017. Jain, was happy with the cumulative increase in textiles and clothing exports during April-December 2017, but was unhappy with the consistent increase in imports of textiles and clothing during the same period. Imports during December 2017 stood at $165.34 million as compared to $137.24 million in December 2016, registering an increase of 20.48 per cent.

Jain further pointed out that as per latest data from Export Promotion Bureau of Bangladesh, India’s imports of garments from Bangladesh touched $111.3 million during July to December 2017, indicating a sharp rise of 66 per cent as against $66.9 million during the same period last year. This situation is negatively affecting the domestic yarn, fabric and garment manufacturers. There is a greater need now to impose safeguard measures such as Rules of Origin and Yarn Forward and Fabric Forward Rules on countries like Bangladesh and Sri Lanka that have FTAs with India to prevent cheaper fabrics produced from countries like China sent via these countries. 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 is putting the Indian garment industry at a major disadvantage.