Ministry of Commerce and Industry records show that import of yarn, fabrics and made-up articles in December 2017 went up by 20 per cent as against the corresponding month of ’16, however, apparel exports fell by 0.3 per cent between April and Dec. 2017 and 8 per cent in December. Sanjay Jain, Chairman, Confederation of Indian Textile Industry, was concerned over the issue as export data of Bangladesh showed India imported garments worth $111.3 million during July-December 2017 from Bangladesh, which was 66 per cent higher when compared to the same period of previous year. Imports of knitted apparel from Bangladesh were valued at $20.6 million in July-December 2016 and rose to $36.5 million between July-December last year. Despite the fact that total export of textile and apparel rose 2 per cent between April and December 2017 over the first nine months of 2016-17, apparel exports dropped by 0.3 per cent during the same period and 8 per cent in December.

A top garment exporter blamed the decline in exports to the revision of duty drawback rates, “Once an international buyer enters into a contract with an Indian supplier, the rates are fixed and might only go down in the future, however, cotton and yarn prices are going up in the domestic market. Further, the government has reduced the duty drawback rates. After GST, we do not know yet what refund we will get on duties paid on exports.”

Jain is of the view there is a need to impose safeguards such as Rules of Origin, Yarn Forward and Fabric Forward rules on nations such as Bangladesh and Sri Lanka that had free trade agreements with India and China. “Garment manufacturers in India have to pay duty on imported fabrics, while Bangladesh can import fabric from China duty-free, convert it into garments, and sell to India duty-free,” he said in a statement.