The country’s largest man-made fabric (MMF) hub in Surat is still awaiting central government’s notification on increase in basic customs duty (BCD) on imported fabrics.
After the government’s announcement on increasing BCD on MMF fabrics from 10 per cent to 25 per cent in October, the industry is still awaiting the official notification in this connection. Industry leaders said import of fabrics, especially from China, has seen a sharp increase post-GST at almost 30 per cent.
Confederation of Indian Textile Industry (CITI) chairman Sanjay Jain said, “MMF yarn, cotton fabric and MMF fabric are largely affected by cheaper imports from China, Indonesia, Thailand and North Korea where fabric industry is subsidized substantially to increase their share of fabric in world textile trade. Moreover, Indian fabric manufacturers have no protection from FTA countries that have been importing fabrics from China, Indonesia and Pakistan and selling garments made from such fabrics to India.”
Industry sources said over Rs 5,000 crore worth of undervalued fabrics are imported from China and other countries to India per annum. With fixing of floor price by the government, the importers will have to show the real value of fabrics and undervaluation is impossible.
The import of cheap and undervalued fabrics in the country has resulted in the closure of 40 per cent of powerlooms in the textile hubs of Surat, Itchalkaranji, Malegaon, Bhiwandi, Burhanpur, Varanasi, Salem and Erode. The situation of Banarasi weavers is very tough as imported silk fabric is quite cheap than what is manufactured by Banarasi weavers.
Surat’s power loom weavers manufacture 4 crore metre of fabrics per day, which have been reduced to 1.5 crore metre per day post-GST. Around 95,000 power loom machines have been sold in scrap and more than 50,000 textile workers rendered jobless.
Federation of Indian Art Silk Weaving Industry (FIASWI) chairman Bharat Gandhi said, “There was an announcement from central government on the increase of import duty from 10 per cent to 25 per cent in imported fabrics, but the same is yet to be implemented. Still, imported fabrics is being dumped into the country. Last month, the imports have seen an increase of more than 30 per cent.”
Gandhi added, “The situation of fabric manufacturers in the textile hubs across the country, including Surat, is very bad. Many units have shut shops. Now, the government has to act fast or else the textile sector will be on the death bed soon.”