Fibre2Fashion enumerates the various policy reforms undertaken by the Indian Government to boost the textile-garment sector

India, the second largest exporter of textiles and apparels in the world, has a big manufacturing base and high raw material support. The textile industry is one of the major contributors to the country's economy. It holds a 7 per cent share of the total industrial output, 2 per cent of the total gross domestic product (GDP) and 15 per cent of the total income from exports. About 45 million people are employed in this industry.

The ministry of textiles and related government organisations have taken multiple initiatives last year to boost Indian trade, preferably exports. 

Tariff Reforms

Here is a list of product-specific reforms undertaken by the government:

July 2018

  • The government has doubled import duty for 50 textile products like jackets, suits and carpets. The duty was raised to 20 per cent from 10 per cent to promote domestic manufacturing industry.The Central Board of Indirect Taxes and Customs (CBIC) also increased the ad-valorem rate of duty for certain items. Hence, the import of the woven fabrics, dresses, trousers, suits, baby garments and a variety of knitted fabric became expensive. But still India allowed duty free access to least developed countries like Bangladesh.

  • The textiles ministry imposed anti-dumping duty of up to $528 per tonne on import of polyester yarn that is majorly used in automobile and other industries. The duty imposed is in the range of $174-528 per tonne. It will be effective for five years. High tenacity polyester yarn (industrial yarn) is used for manufacture of tyre cord fabric, seat belt webbing, conveyor belt fabric, ropes, coated fabric and automotive hose.

August 2018

  • The government again doubled the import duty on textile products to further incentivise the domestic textile and clothing industry. It included 328 tariff lines of textile products and tariff increased from 10 to 20 per cent. This move made imported garments, fabrics, carpets and specialised fabrics costlier. Higher duty was imposed on shirts, trousers, coats, blazers, kids garments and lingerie.

October 2018

  • According to the Directorate General of Trade Remedies (DGTR), nylon filament yarn (multi-filament) was being exported to India from the European Union (EU) and Vietnam below normal values. Hence, the government imposed anti-dumping duty on import of nylon filament yarn, mainly used for curtains, embroidery threads and fishnets, from Vietnam and the EU, ranging between $128.06 and $719.44 per tonne. The duty is effective for five years starting October 6, 2018.

  • The government imposed definitive anti-dumping duty on a flax yarn (100 per cent linen yarn) used in fabric industry from China. It ranged from $1.30 per kg to $4.83 per kg depending on the producer and exporter from China.