India's textile hub in Gujarat's Surat district wants to see reduction in import duty on yarn in the upcoming budget for the financial year 2013-2014. Traders at the textile hub are finding it very difficult to compete with China and the other Asian nations that are supplying cheaper products. An import duty of 5-16% makes the Indian products very expensive in the market.
High taxes have an adverse impact on the domestic weaving industry as well as the country's fiber export. The industry analysts feel anti-dumping duty, meant to protect the local industry from unfair competition, is being misused by bigger industrialists to gain monopoly over the trade. Big producers jack up prices to maximize profits, knowing that cheaper imported yarn is out of reach for small-scale weavers. Traders say even a partial reduction of the anti-dumping duty will help improve the situation.
“Recently, anti-dumping duty has been imposed on different yarns and if the government removes anti-dumping duty from yarn and instead imposes the same duty on the final product like clothes, narrow fabric or technical textile then it would be beneficial for the traders in India,” Jitendra Vakharia, member of South Gujarat Textile Processors' Association told ANI.
“They (traders) will be capable to compete with readymade imported fabric,” he added. Traders have to say that even a partial reduction of the anti-dumping duty will help improve the situation.