NEW DELHI: Following the recommendation by the ministry of textile, the government has announced to double import duty on 328 textile products to 20 per cent, which it says will boost the ailing textile sector, promote local manufacturing and create employment opportunity.
The government informed the parliament that it seeks to “increase customs duty on 328 tariff lines of textile products from the existing rate of 10 per cent to 20 per cent...under Section 159 of the Customs Act, 1962,”a notification tabled by Minister of State for Finance Pon Radhakrishnan in the Lok Sabha said.
According to finance Ministry sources, the move came after the recommendation from the textile ministry, which had said that local manufacturing is suffering due to cheaper imports from China and other neighbouring countries.
By imposing import duty, government will further enhance employment prospects of the job intensive sector like textile, which roughly employs about 10.5 crore people. The import duty will make local manufacturing more competitive against the cheap imported products.
Also the proposed recommendation for up to 20 per cent duty hike on textile products, will be compatible with the World Trade Organization (WTO).
This is for the second time government increased import duty. Last month, the government had doubled import duty on over 50 textile products -- including jackets, suits and carpets -- to 20 per cent.
As per industry estimates, imports of textile yarn, fabric and made-up articles have grown by 8.58 per cent to $168.64 million in June, of which, about $3 billion were from China. Exports of cotton yarn, fabrics, made-ups, handloom products grew by 24 per cent to $986.2 million in the same month. While man-made yarn, fabrics, made-ups exports grew only 8.45 per cent to $403.4 million, while exports of all textile readymade garments dipped by 12.3 per cent to $13.5 billion at the same time.
However, the 20 percent duty will not be applicable to products sourced from Bangladesh, Vietnam and Cambodia countries due to the FTA.