Government Doubles Import Duty On 328 Textile Items To 20%

The government doubled import duty on as many as 328 textile products to 20 percent to boost local manufacturing in a second such increase in two months, according to a notification tabled by Minister of State for Finance Pon Radhakrishnan in the Lok Sabha.

Higher duties would give an edge to domestic manufacturers as imported products are currently cheaper. Increase in manufacturing activity will help create jobs in the sector, which employs about 10.5 crore people.

The government had last month doubled import duty on over 50 textile products including jackets, suits and carpets to 20 percent, a move that is aimed at promoting domestic manufacturing. The Central Board of Indirect Taxes and Customs had hiked import duties and raised the ad-valorem rate of duty for certain items.

According to trade experts, India would not be able to give any direct exports incentive to the textile sector, so there is a need to support the segment to encourage domestic manufacturing. Imports of textile yarn, fabric, made-up articles grew by 8.58 percent to $168.6 million in June.

Exports of cotton yarn, fabrics, made-ups and handloom products grew by 24 percent to $986.2 million. Man-made yarn, fabrics, made-ups exports grew 8.45 percent to $403.4 million. Exports of all textile ready made garments dipped by 12.3 percent to $13.5 billion.