India says it needs to take measures to prevent Chinese textiles from entering duty free
President of the Federation of Textile Industries India Sanjay KJain said, the Indian textile industry hopes to SAFTA (SAFTA) rules of origin be adjusted to make better use of Indian origin yarn and textile exports. He said that Bangladesh’s textile exports to India are duty-free, which is equivalent to the tax-free entry of Chinese textiles into India.
In 2006, India allowed Bangladesh under free trade agreements, duty-free import of readymade garments from Bangladesh to limit the number to 8,000,000. However, this restriction was cancelled in 2010.
Bangladesh imports Chinese textiles, produces clothing and exports it to India without paying any import duties. Jain told the news agency, as imports of textiles made in China for export, Bangladesh, these textiles are not subject to import duties, which resulted in a back door of Chinese textiles into India. However, Indian garment manufacturers must pay a 20% import duty if they use the same Chinese fabric.
According to CITI statistics, India’s imports of clothing from Bangladesh increased from $106.72 million in April-December 2016 to $121.4 million in the same period in 2017.
Jain in the "near future environmentally sustainable textiles and fashion trends" seminar organized by the Calcutta JDBirla Institute, said: "Since India has a non-reciprocal basis, the duty-free, quota-free facility extended to 49 LDCs And there are no procurement restrictions. It is expected that India may face more such situations in Bangladesh in the future."
Jain cites the example of the United States, which implements procurement restrictions under the North American Free Trade Agreement (NAFTA) to accept duty-free imported clothing from Mexico and other North American Free Trade Agreement countries.
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