NEW DELHI:In order to help the ailing domestic textile sector, the government has decided to double import duty on over 50 textile products including carpets, woven fabric, jackets and baby garments, among others.
In a notification issued last night, the Central Board of Indirect Taxes and Customs listed textile products on which duties have been hiked to 20 per cent from 10 per cent. The imported products which have become expensive after the issuance of the list include woven fabrics, dresses, trousers, suits and baby garments.
The same rate will be applicable on jute fabric, paper yarn, different varieties of carpets, laminated fibre and sheets made from fibre. On some items, the rate would be 20 per cent or Rs 38 a metre, whichever is higher. The ad-valorem rate of duty for certain items has also been raised. However, there is no mention that these duties will be effective from which dates.
According to sources in the Commerce Industry, the hike was intended at giving a boost to the domestic textile industry that is also a key employment generator. As per the WTO norm, the government will not be able to extend any further benefits to the textile sector.
According to government data, imports of textile yarn, fabric and made-up articles grew by 8.58 per cent to $168.64 million in June. Export of all readymade garments dipped by 12.3 per cent to $13.5 billion.
However, imports from less developed countries will remain duty-free. “The duties have been doubled on most of the textile products. It will help boost domestic manufacturing, but least developed countries including Bangladesh would continue to enjoy duty free access to Indian markets,” said FIEO DG Ajay Sahai.
According to Ernst & Young partner Abhishek Jain, “Aligned to the ‘Make in India’ initiative, the increased customs duty on import of textile products should entail the domestic manufacturing of these products witnessing a growth.”
Exports of cotton yarn/fabrics/made-ups, handloom products etc grew by 24 per cent to $986.2 million.
Man-made yarn/fabrics/made-ups exports grew 8.45 per cent to $403.4 million.