The Clothing Manufacturers Association of India (CMAI) has urged the ministry of textiles to levy a temporary additional duty on imports of garments and fabrics from all countries, including those with whom India has free trade agreements (FTAs) or zero-duty agreements. CMAI is the pioneer and most representative association of the Indian apparel industry.
For a long time, CMAI has been drawing the government’s attention to the dangers posed by duty-free imports of garments from Bangladesh, as it also allows back-door entry of Chinese fabrics into India, consequently impacting the MSME dominated domestic garment industry.
In 2017-18, Bangladesh’s share in India’s total garment imports was 24 per cent amounting to $201 million. In 2019-20 this share is estimated to have increased to 34 per cent. In terms of value, the imports have surged to $409 million.
In the past, the government had pointed out to the various treaties signed with Bangladesh and other SAFTA countries, and during the several interactions and discussions with CMAI representatives has said that it would be difficult, if not impossible, to dilute the agreements.
However, considering the dramatically changed circumstances prevailing today, in the aftermath of the COVID-19 pandemic, CMAI has urged the textiles ministry to levy an additional duty on imports of garments and fabrics from all countries, including those with whom India has FTAs or zero-duty agreements.
“Such an additional duty will result in a level playing field for domestic manufacturers, and help them compete with the Bangladesh garment industry, which has currently at least 15 per cent cheaper production cost,” CMAI said in a letter to Union textiles minister Smriti Irani and Union minister of commerce and industry Piyush Goyal.
Imposing such an additional duty will result in the quick recovery of hundreds of MSMEs who are today on the verge of collapse, and the possible savings of hundreds of thousands of jobs. Additionally, this will enable the government to collect approximately $100-150 million for its fight against COVID-19, depending on the quantum of duty imposed, the letter said.
CMAI has suggested that such a measure may be undertaken only for a limited period of 12 months.
