In view of rising import of apparel products from Bangladesh, the Clothing Manufacturers Association Of India (CMAI), the pioneer and most representative association of the Indian apparel industry, has urged the government to bring in the ‘rules of origin’ clause.
Bangladesh enjoys full exemption of Basic Customs Duty which facilitates way for Chinese fabric in India through Bangladesh in the form of garments. In addition to CMAI, CITI has also expressed apprehension about the issue and emphasized on the need of Rule of Origin clause to deal with this situation.
The government’s decision to increase in Basic Customs Duty (BCD) on 328 textile products in order to protect domestic industry was appreciated by the textile bodies in India. However, it has no impact on import from Bangladesh due to duty free access given to it.
The ‘rule of origin’ issue was discussed with the ministries of commerce and textiles. According to the clause, use of either own or Indian yarn should be made mandatory for Bangladesh under the South Asian Free Trade Area (Safta) agreement to avail duty free access to India for their fabrics.
CMAI is concerned that absence of ‘rule of origin’ would impact fabric production in India. Chinese garments attract Specific Duties not the Ad Valorem duty.
