Steady Rise in Textile Imports – a concern for the domestic industry: CITI

On the release of foreign trade data for the month of December 2017 by the Ministry of Commerce & Industry, Shri Sanjay Kumar Jain, Chairman, CITI, expressed concern over the 3% decline in CAGR in textiles and apparel exports compared to the corresponding period of December 2016. The exports of textiles and apparel stood at US$ 2996 million during December 2017 as against US$ 3075 million in December 2016. However, the cumulative export has slightly improved by 2% CAGR as the exports stood at US$ 26,136 million in April-Dec 2017 in comparison to US$ 25,721 million in April-Dec 2016. Shri Jain further stated that the share of textiles and apparel exports in the All Commodity Exports (ACE) also declined by 2% in December 2017. A comparative statement showing the sector-wise performance is given below:

 

India’s Exports of Textiles & Clothing to the World

Values in USD Mn

Export Category

Dec'16

Dec'17

CAGR

April -Dec 16

April -Dec 17

CAGR

Cotton Yarn/Fabs./Made-ups, Handloom Items etc.

935

939

0.4%

7,177

7,513

5%

Man-made Yarn/Fabs./made-ups etc.

390

417

7%

3,326

3,554

7%

Apparel

1,454

1,337

-8%

12,426

12,386

-0.3%

Textile and Apparel (including Jute, Carpet and Handicrafts)

3,075

2,996

-3%

25,721

26,136

2%

All Commodity

24,057

27,030

12%

199,467

223,513

12%

% of T&A in Total Exports

13%

11%

 

13%

12%

 

Source: Ministry of Commerce & Industry

 

Shri Sanjay Jain while appreciating the cumulative increase in the textiles and clothing exports during April-December 2017 also expressed concernsover the consistent increase in imports of textiles and clothing during the same period. The imports of textiles during December 2017 stood at US$ 165.34 million in comparison to US$ 137.24 million in December 2016, registering an increase of 20.48 per cent.

Quick Estimates on Imports for the month of December 2017

Value in USD Mn

Category

Dec'16

Dec'17

% Change

April-Dec 2016

April-Dec 2017

% change

Textile Yarn Fabric/Made-ups articles

137.24

165.34

20.48%

1,160

1,388

19.65%

Source: Ministry of Commerce & Industry

Shri Jain also pointed out that as per the latest statistics released by Export Promotion Bureau of Bangladesh, India’s imports of garments from Bangladesh has reached US$ 111.3 million during July to December 2017, indicating a sharp rise of 66% from US$ 66.9 million during the same period last year. The data regarding imports of garments from Bangladesh post GST is illustrated in table below:

Imports of Garments from Bangladesh Post GST

 

In USD Million

July-Dec 2016

July-Dec 2017

% change

Knitted Apparel

                   20.6

                   36.5

77%

Woven Apparel

                   46.3

                   74.8

62%

Total

                   66.9

                 111.3

66%

Source: Export Promotion Bureau of Bangladesh

 

Shri Sanjay Jain also stressed that the on-going scenario is negatively affecting the domestic yarn, fabric and garment manufacturers. He further stated that there is a greater 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 this figure is expected to go up in coming months.

 

At the same time, Shri Sanjay Jain pointed out that India can increase its exports of cotton yarn and fabrics provided the sector is restored with export incentives. CITI has been strongly representing the case of cotton yarn and fabrics with every government department, including PMO to enhance the competitiveness of the cotton yarn and fabric sector. He stated that at present India’s share of cotton yarn in world trade is 26% and it is declining steeply as the incentives given to the cotton yarn sector were withdrawn in 2014 and MEIS which was extended to the entire value chain was not extended to cotton yarn. Moreover, there are various state levies up to the tune of 8% on cotton yarn which are not refunded at any stage. Similarly, Fabric sector is not getting refund of state levies of around 6%. By including cotton yarn under MEIS and providing ROSL for fabrics, Indian can retain its competitiveness in the global market.

Shri Sanjay K. Jain, stated that he is optimistic that the Government would consider CITI’s representations and resolve the issues of the textile and clothing sector on an urgent basis.

 

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