The 9th Asian Textile Conference (ATEXCON), the ﬂagship annual event of Confederation of Indian Textile Industry (CITI), held on 14th March, 2018 provided a common platform to all the stakeholders of the textile value chain to express their innovative ideas and deliberate on policy reforms, emerging trends in textile and apparel, technological advancements in textile manufacturing, raw materials scenario, trade and investment prospects, advancements in textile & apparel retail, etc. The deliberations were fruitful in throwing light to equip the Textile Industry to move beyond the conventional paradigms for achieving the desired targets.
The session on “Policy Support to Achieve US$ 300 Bn. Market”, chaired by Dr. Kavita Gupta, IAS, Textile Commissioner, Government of India made deﬁnite policy recommendations for the revival of textile and apparel industry. The industry was unanimous on its ability to meet double digit growth levels by virtue of its manufacturing competitiveness. The industry and association representatives elucidated that we are not fundamentally uncompetitive in most segments of textiles & apparel – we don’t need crutches to ﬁght global competition, however we need Government support for the disadvantage caused due to the competitors’ having duty free access and unrebated taxes & duties on the domestic front.
It was highlighted that the current duty drawback rates and ROSL scheme of the Government are not enough to counteract the incidence of taxes in the industry. It is estimated that about 4 to 5% of taxes go unrebated that inevitably gets passed on to the international buyer, resulting in lower export competitiveness of the Indian industry. It is hence required that government analyzes this aspect, with the industry involvement, and take the necessary corrective steps to enhance our competitiveness.
It was also emphasized that after the implementation of GST, the eﬀective import duties on textile and apparel have come down which is negatively impacting the domestic manufacturers. It was recommended that Government should increase the import duties to the pre-GST level to support the domestic industry.
It was then discussed that for India to achieve ambitious targets, development of manmade ﬁbre based value chain is critical. Also, the fast-growing demand of manmade products in the domestic market would eventually result in higher imports if such products are not available at right price. The Government may adopt a ﬁbre neutral policy and also ensure that manmade ﬁbres that need to imported should be allowed at viable rates.
India is at disadvantage with its neighbouring nations like Bangladesh, Sri Lanka and Pakistan who have duty free access to European market whereas imports from India attract 9.6% import duty. It was emphasized that government needs to fast track the on-going discussion on EU FTA in order to provide apparel exporters with a level playing ﬁeld. Finalizing FTA with EU could change the entire shape of Indian industry wherein Government would not have to pay any other kind of support.
Also, we have not been able to take full advantage of our FTAs with Japan and South Korea because of stringent rules of origin and placement of our major products in the sensitive / exclusion list. These FTAs may be revisited and re-negotiated, if necessary, to ensure that our main products such as Cotton yarn get the duty-free access to these markets on an immediate basis.
It was also highlighted that we have provided duty free access to Bangladesh’s apparel exports to our country as a result Indian apparel imports from Bangladesh in April-December FY17-18 stood at US$ 124 mn which were 16% higher than in same period in FY16-17. The issue here is that the duty-free access has been provided to Bangladesh without any sourcing restrictions which is resulting in Chinese fabric entering into Indian markets via Bangladesh. Indian government needs to put desired rules of origin to ensure that apparels made from fabrics made in India, Bangladesh or other SAFTA nations only get such duty-free access to India.
Finally, it was recommended that there should be a single platform for discussion of Central and State Textile policies which will aid in looking at the larger picture and in making appropriate decisions on the support measures.
CITI as the apex body of Indian textile and apparel industry would like to appeal to the government on behalf of the entire industry to take cognizance of the above issues that Indian industry is facing today and take necessary corrective steps.
Let me take this opportunity to once again thank all the speakers, sponsors, delegates, media and our knowledge partner – Wazir Advisors for their whole-hearted support in making 9th ATEXCON a grand success.
I am glad to inform you that CITI announces the starting of its Diamond Jubilee Celebrations this month and is planning to have a Global Conference during November-December, 2018. I look forward to everyone’s support and cooperation for making it fruitful and successful.