The first meeting of the newly constituted Textile Advisory Group for Man-Made Fibers under the Textiles Ministry is expected to bring changes in customs duty on knitted fabrics to reduce imports.
R.K. Vij, Secretary General of the Polyester Textile Apparel Industry Association, said he raised the issue of “illegal and undervalued import of Chinese knitted fabric”, which is mixed with woven fabric.
Almost 1,000 tonnes of fabric is dumped in India daily due to the difference in customs duty for woven and knitted fabrics. Currently, the duty on woven fabric is 20% of the value of imports, or Rs.115-Rs.150 per kg, whichever is higher, while the duty on knitted fabric is a flat 20%.
The annual revenue loss to the government is approximately Rs. 6,000 cr due to lower customs duty, Vij claimed. Currently, knitted fabric is imported at $1.5/kg, which is even lower than the export price of yarn, when the finished product should cost about $4.5/kg, Vij reckoned, highlighting the extent of undervaluation. “The Minister has assured to resolve this anomaly within two months,” Vij said.
Meanwhile, the Confederation of Indian Textile Industry (CITI) and other textile associations have demanded precautionary measures to ensure cotton prices do not shoot up later this cotton season.
A memorandum by CITI said, “The Cotton Corporation of India should start selling cotton, which it procured at Minimum Support Price, from February to only textile mills. It should not sell at lower prices to bulk buyers. The CCI should sell cotton in multiples of 130 to 150 bales to benefit small spinning mills.”
