After the government’s announcement on increasing basic customs duty (BCD) on imported MMF fabrics from 10 per cent to 25 per cent in October, the largest man-made fabric (MMF) hub of India, Surat is still awaiting Central Government’s official notification in this connection. According to industry leaders, import of fabrics, especially from China, has increased sharply post-GST at almost 30 per cent while Surat’s power loom weavers who manufacture 4 cr mtr of fabrics per day, have been reduced to 1.5 cr mtr per day post-GST and more than 50,000 textile workers rendered jobless.
Confederation of Indian Textile Industry (CITI) Chairman Sanjay Jain said that MMF yarn, cotton fabric and MMF fabric are largely affected by cheaper imports from China, Indonesia, Thailand and North Korea where fabric industry is subsidised substantially to increase their share of fabric in world textile trade. Moreover, Indian fabric manufacturers have no protection from FTA countries that have been importing fabrics from China, Indonesia and Pakistan and selling garments made from such fabrics to India. Industry sources said that over Rs. 5,000 cr worth of undervalued fabrics is imported from China and other countries to India per annum.
The import of cheap and undervalued fabrics in the country has resulted in the closure of 40 per cent of powerlooms in the textile hubs of Surat, Itchalkaranji, Malegaon, Bhiwandi, Burhanpur, Varanasi, Salem and Erode. With fixing of floor price by the government, the importers will have to show the real value of fabrics and undervaluation is impossible.