Post GST Import of Garments from Bangladesh jump by 56%: CITI

 

Shri Sanjay Kumar Jain, Chairman CITI stated that according to the latest data released by Bangladesh Export Promotion Bureau, India’s import of garments from Bangladesh has reached US$ 87.4 mn. during July to November 2017, indicating a sharp increase of 56% from US$ 55.92 mn during the same period last year.

 

Table 1: India’s imports of garments from Bangladesh

Values in US$ Million  

Commodity

July to November 2016

July to November 2017

Growth (%)

Knitted Apparel

17.9

30.1

69%

Woven Apparel

38.1

57.3

51%

Total

55.9

87.4

56%

Data Source: Bangladesh Export Promotion Bureau

 

During July to November 2017, India’s imports of knitted apparel from Bangladesh increased by 69% while the imports of woven apparel increased by 51% corresponding to the same period last year.

 

Mr. Jain highlighted that the basic custom duty on import of garments from Bangladesh is exempted. In the Pre-GST Scenario, import of garment from Bangladesh was attracting cost of Rs. 77/pc (where MRP Rs. 999/pc) and Rs. 116/pc (where MRP is Rs. 1500/pc) in the shape of CVD + education cess thereon. However, Post- GST scenario, there is no cost for import of garments from Bangladesh. Similarly, in the case of import of Garment from other countries, the cost has been substantially reduced by Rs.77/pc and Rs.116/pc where MRP is Rs.999/pc and Rs.1500/pc respectively.

 

Hence, Indian garment industry will face stiff competition from imported garments especially from Bangladesh where production cost is already less than India.

 

 

Shri Sanjay Kumar Jain pointed out that there is an urgent need to impose safeguard measures such as Rules of Origin, Yarn Forward and Fabric Forward Rules on the countries like Bangladesh and Sri Lanka that have FTAs with India to prevent cheaper fabrics produced from countries like China routed through 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 Indian garment industry at a major disadvantage and it is feared that this figure will go up further in the coming days as more Indian Brands shift sourcing from India to low cost duty free countries like Bangladesh and Sri Lanka.

 

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