The textile industry fears an increase in imports from Bangladesh and China, where the cost of manufacturing is lower due to cheaper labour. “The GST
subsumes all taxes, including protections. Garment imports will become cheaper due to removal of the SAD,” said an official from the Cotton Textiles Export Promotion Council. The textiles ministry has set an export target of $45 billion for FY18, marginally lower than the $48 billion set for FY17.
The government plans to present a new textiles policy by September. It is also organising Textiles India 2017, a seminar to bring global buyers under one roof, between June 30 and July 2 in Gandhinagar. While 61 countries have booked pavilions, 1,900 stalls are expected to be booked by state governments and industry players.
“Our aim is to increase textiles exports and create a competitive environment. We would like states to take such initiatives to help the industry showcase its products directly,” said Anant Kumar Singh, secretary in the textiles ministry. Singh said his ministry had done some work on the new textiles policy, which would focus on India’s competitiveness in the world market.
Effective levies on imported garments
* Countervailing duty include excise duty on cotton 6% and polyester 12.5% with Cenvat credit
* Optional duty of 2% with abatement of 40% on it (i.e. 0.80%) means effective duty of 1.2% without Cenvat credit
* 4% of special additional duty, which along with cess, educational cess and others wok out to Rs 5.5%.
* Thus, duty protection of 5.5% from cheap import
* All duties subsumed in 5% of the GST for both domestic manufacturers and importers
* No protection, as both domestic manufacturers and importers would require to pay same duty