There is apprehension in Ludhiana that with GST imported garments will get cheaper.

The special additional duty stood as a protection for domestic apparel players. With GST, this duty protection will be removed and imported garments will be five to six per cent cheaper.

The textile industry fears that there will be an increase in imports from countries such as Bangladesh and China, where the cost of manufacturing is lower due to the availability of cheaper labor.

GST will render imported polyester fabric cheaper than made-in-India polyester fabric. The industry wants the GST on polyester yarn to be brought down from 18 per cent to 12 per cent.

Prior to GST, the industry had duty protection of 5.5 per cent from cheap imports. After the GST, all duties have been subsumed in five per cent of GST for both domestic manufacturers and importers. This, in effect, means no protection, as both domestic manufacturers and importers will be required to pay the same duty.

Prior to GST, the countervailing duty included six per cent excise duty on cotton and 12.5 per cent with Cenvat credit on polyester. Ludhiana is a leading producer of woolen and acrylic knitwear although it also uses extensively cotton and other blended fibers to produce a wide range of fabrics, hosiery, knitwear and readymade garments.