Import of yarn, fabrics, made-up articles rise by 20pc in Dec

Strong need to impose safeguards such as Rules of Origin on nations like Bangladesh and Sri Lanka that had free trade agreements with India to prevent cheaper fabrics produced from countries like China routed through these countries. Imports of yarn, fabrics and made-up articles during December last year rose 20% compared with December 2016, as per the Ministry of Commerce and Industry data.

The export data of Bangladesh showed India imported garments worth $111.3 million during July-December 2017 from Bangladesh, which was 66 % higher as against the same period of the previous year. Imports of knitted apparel from Bangladesh were worth $20.6 million in July-December 2016 and rose to $36.5 million between July-December last year.

Meanwhile, though total export of textile and apparel rose 2% between April and December 2017 over the first nine months of 2016-2017, apparel exports dropped 0.3 % during the same period and 8% in December alone.

According to garment exporters, one of the reasons for the decline in exports is revision of duty drawback rates. Once an international buyer enters into a contract with an Indian supplier, the rates are fixed and might only go down in the future. But, cotton prices and yarn prices are going up in the domestic market. And, the government has reduced the duty drawback rates. After GST, they do not know yet what refund they will get on duties paid on exports.

According to Sanjay Jain, chairman, Confederation of Indian Textile Industry, it is a matter of concern as it is negatively affecting the domestic yarn, fabric and garment manufacturers.