Indian textile industry is witnessing a drastic surge in imports. MMF yarn import was up by 68 per cent in July, whereas a surge of 58 per cent was noted in the month of August.
MMF fabric import too increased by 30 per cent in the reporting months (July and August).
Meanwhile, cotton fabric import witnessed an escalation of 45 per cent and 29 per cent in July and August, respectively.
It is being cited that traders started importing more due to higher GST (Goods and Services Tax) rates. GST was implemented in the country on July 1 this year and has created a lot of reverberation since then.
“Basic Customs Duty along with Countervailing Duty and Special Additional Duty were levied on textile imports pre-GST. These duties have now been withdrawn post-GST and IGST is in existence now,” explains Sanjay Kumar Jain, Chairman, Confederation of Indian Textile Industry (CITI).
Further, import duty on MMF Fabric increased from 10 per cent to 20 per cent after the imposition of the new tax regime. However, the import duty on MMF yarn and cotton fabric have been kept at the old rates.
The revised duties on textile imports pushed the Indian market to shift towards importing cheap textile products from China, Thailand, Indonesia and North Korea.
The above-mentioned countries have subsidized the fabric industry to boost trade in the global market. This affected the Indian market as an increase of 12.1 per cent in textile import was further estimated for October 2017.
FTA countries such as Bangladesh are getting benefits of these cheap fabrics by selling low-priced garments in the Indian market as the production cost in these countries is already lesser than India.
CITI has requested the Commerce and Textile Minister to increase import duty on MMF yarn, Cotton fabric and MMF fabrics by 15 per cent to protect the domestic yarn, fabric and garment manufacturers from the cheap import of textile products.
The textile trade association also seeks stricter Rules of Origin, Yarn Forward and Fabric Forward Rules on countries that have FTAs with India.
Bharat Tex Special Report 2026 
