February 4, 2025 | Ludhiana
The government’s decision to impose a BCD of “20% or Rs 115 pkg, whichever is higher” on knitted textiles is commended by NITMA. falls under nine HS codes’ chapter 60. However, only 35% of all fabric imports are accounted for by these 9 HS codes, and the remaining 65% of imports remain undetected.
The government’s action acknowledges that these textiles are being smuggled into the nation at lower-than-invoiced prices and through HS code misrepresentations to avoid the $3.50 MIP that was previously enforced by the government.
While sincerely praising the government for adopting these proactive measures to stop the under-invoiced imports of synthetic textiles and create a fair competition, Mr. Sidharth Khanna, President of NITMA, respectfully makes the following appeals:
Since only 35% of all imports are now covered by the 9 HS codes, the Ministry of Finance and the Ministry of Textiles propose to apply BCD on all HS codes that come under chapter 60 of Synthetic Knitted Fabrics. Additionally, importers have already jumped HS codes to avoid the MIP’s reach and will continue to do so. to avoid BCD as well. This is evident from the fact that, even with MIP in place, total fabric imports under Chapter 60 are rising; the only difference is that imports under MIP codes are declining, which is more than offset by the rise in non-MIP HS codes. This 35% volume will thus be instantly moved to the remaining HS codes.
In order to stop container HS codes, prices, and even weights from being misreported, the Directorate of Revenue Intelligence & Port Authorities plans to increase monitoring at all Indian ports.
- CBI & Enforcement Directorate: To launch a thorough investigative campaign into cases of under-invoiced imports of synthetic knitted fabric (under Chapter 60) and ensure that those responsible are held accountable.
To discourage any other party from interfering with the livelihood of millions of textile workers, all customs data is available on file, and any consignment cleared for less than $3.50 in the previous 12 months must be examined. Additionally, under chapter 60, heavy penalties should be applied to all consignments of knitted fabrics that were invoiced for less than USD 3.50 in the previous 12 months.
In conclusion, Mr. Khanna expresses his appreciation of the Union Budget 2025-2026, with overall budget allocation hiked significantly by approx. 58 % for fiscal 2025-26, primarily due to enhanced allocation of ₹1,148 crore under the PLI scheme coupled with sharp focus on MSMEs & a 5 Year Cotton Mission with a budget of Rs. 500 crore to increase cotton productivity, especially for extra-long staple varieties & several other positive announcements in the budget. He also mentions that with no income tax payable upto Rs.12 lacs will cause a rise in disposable income within the middle and lower classes leading to an increase in consumer spending on apparel. This is expected to have a positive impact on the entire textile value chain. However, he strongly recommends the imposition of new BCD on all HS codes falling under chapter 60.