Textile industry demands curbs on ‘underbilled’ Chinese imports

The labour-intensive textile sector, one of the major driver of the economy, has high expectatios from the Budget. The industry contributes about four per cent to the country’s GDP, 13 per cent to industrial production, eight per cent to merchandise exports and is the largest industrial employer in the country with about 4.5 crore people directly employed.

The industry expects simplified compliance processes, incentives for sustainable and digital initiatives, and enhanced support for MSMEs and startups.

After the imposition of 11 custom duties on cotton import in 2021, the gap between cotton prices in India and international markets has widened significantly. According to Northern India Textile Mills Association, the prevailing situation of lower international cotton prices from the past two years has created an abnormal situation of Indian cotton becoming far more costlier than international cotton prices and resultantly cotton spinning operations becoming unviable in India.

The industry demands to mitigate the plight of the spinning industry, the custom duty on cotton should be abolished and the industry should be allowed to import cotton duty free.

The under invoicing in knitted fabrics especially from China is rampant. According to the industry, this leads to the revenue loss of approximately Rs 5,000 crore per annum to the exchequer coupled with the devastating impact on the domestic industry. The utmost concern is that the pervasive sale of under-invoiced goods, has resulted in the alarming expansion of a parallel economy. So the industry has requested for permanent solution to undervalued imports.

RoDTEP (Remission of Duties and Taxes on Exported Products) scheme for exports has been extended until September 30 and under the Advance Authorisation scheme until December 31, 2024. In order to achieve the ambitious target of reaching USD 350 billion by 2030, with USD 100 billion in exports for the textile industry, the industry seeks validity of the RoDTEP scheme be extended to September, 2025. Besides, it wants RoDTEP rates for textile products restored.

Currently, the PLI scheme applies only to synthetic fibres. To support textile and garment firms, the industry is of the view that PLI must apply to the entire industry as this would eventually incentivise greater investments.