The continuous rise in the import of dyed knitted fabrics, despite the imposition of import duties, is causing concern in Tamil Nadu’s textile industry, according to Prabhu Dhamodharan, the Convenor of the Coimbatore-based Indian Texpreneurs Federation (ITF).
Dyed knitted fabrics are widely used in the production of various garment types. In the first five months of the current fiscal year, India imported knitted fabrics worth $276 million (₹2,270 crores), averaging ₹450 crores per month, primarily from China. Notably, dyed knitted fabrics under one HS code alone contribute to 30% of these imports.
This influx of dyed knitted fabrics has a direct impact on several sub-sectors of Tamil Nadu’s textile manufacturing industry, including spinning, knitting, and processing, as stated by Dhamodharan in an interview with Businessline. The ITF encompasses the entire value chain of textile manufacturing.
Dhamodharan expressed concern over the negative effects of these imports on domestic yarn and fabric manufacturing, with various affiliated manufacturing companies citing growing apprehension.
Tirupur, a major textile hub, produces approximately ₹35,000 crores worth of knitwear apparel, such as t-shirts, innerwear, women’s leggings, and shorts, for exports, and ₹20,000 crores worth of products for the domestic market. To reach ₹50,000 crores worth of finished materials, the necessary basic materials – yarn, fabric, and dyeing capacity – are readily available in and around Tirupur.
However, the entry of imported dyed knitted fabric into the Tirupur market directly affects units operating in spinning, dyeing and processing, knitting, and compacting sectors. Dhamodharan explained that “the imported dyed fabric eliminates all the processes that have been done in and around Tirupur and Coimbatore with the involvement of multiple units.” He further stated that the cluster can produce ₹15,000 crores worth of such fabric.
A preliminary study revealed that a majority of these imports are facilitated through traders who distribute the fabric to domestic garment manufacturers, particularly in key hubs like Coimbatore and Tirupur. The retail selling price of these dyed fabrics in the domestic market fluctuates between ₹320 and ₹350 per kilogram.
Considering the 20% import duty, the cost of these fabrics upon landing is concerning. Manufacturing at such price points appears unviable in any part of the world, Dhamodharan pointed out.
He stressed the need to scrutinize the materials used and ensure that imports are correctly valued, thereby avoiding potential malpractices like under-invoicing or mislabelling with different materials and HS codes.
With numerous spinning mills, knitting fabric and processing units in Tamil Nadu producing similar fabric, the surge in imports poses a significant threat to the state’s textile manufacturers.
Dhamodharan emphasized the importance of conducting a thorough examination of this issue and presenting a detailed report to the Union and state governments, seeking their attention and assistance.
