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Increasing RMG imports from BD worry Indian textile firms

July 03, 2019 00:00:00

CHENNAI: Concerned about increasing imports from Bangladesh, garment makers from the industrial clusters of Coimbatore and Tirupur in Tamil Nadu have approached the central government, seeking its assistance in getting supply contracts from Indian retailers and brands, according to a report by economictimes.indiatimes.com.

The Indian Texpreneurs Federation (ITF), an association of more than 560 textile establishments with a combined turnover of over Rs 400.00 billion, wrote to textile minister Smriti Irani in early June, seeking her ministry's intervention.

The companies are worried because the increasing imports of readymade garments are hurting them in the local market even as they grapple with tepid growth in exports.

"Indian clusters can better serve the sourcing needs of both Western and Indian brands than products sourced from Bangladesh, Sri Lanka or Indonesia," the federation said in the letter. ET has seen a copy of the letter.

According to data collated by ITF, textile imports from Bangladesh jumped 53 per cent in fiscal year 2018-19 to $1.07 billion (Rs 7,500 crore).

Local entrepreneurs fear neighbours like Bangladesh will edge them out in the Indian market due to the advantages they enjoy such as lower manufacturing costs and free-trade agreements (FTAs) that create a duty-free expressway for their products into this country.

The challenge from Bangladesh is also affecting India's prospects in the international market. According to an ITF survey of more than 320 participants in the Indian textile industry, cost ineffectiveness, narrow focus on target countries and labour shortage are top reasons Indian exporters are unable to pip those from the neighbouring country in the export markets.

"We are hoping that the Indian government will help us engage with brands, retailers who might look at sourcing from India," said Prabhu Damodharan, the convenor for ITF and a mill owner in Coimbatore.

After the implementation of GST, India had removed a 12 per cent countervailing duty on imports from Bangladesh.

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