GST impact on textiles
concern of exporters
GST will cover several taxes and duty for import products from exportors (as a refund in the form of duty drawback)
should not be outpriced by competitors
Indian textile Industry
current data
textile and clothing export increased by just 0.9 % this year
cotton yarn, fabrics and madeups declined by 3.06 %
man made yarn, fabric and madeups also declined by 2.75 %
but ready made garment clothing rose by 2.31 %
GK
India is the second largest manufacturer of textile ; next to china
India has 4.89 % share in global export of textile
China has 35 %
Bangladesh and Vietnam just next to India
World imports of textile and clothing fallen by 2.39 % in 2016
75 % of the units of garments and weaving is in unorganised sector
GST announced 18 % tax on Man made fibre and 5 % on garment fabric
why the exports have fallen
competition for indian textile
bit of sloedown of Indian exports in last 4-5 years
India is a leading producer of cotton
purely cost competition
revised drawback rates under GST have not been annouced
so that exorters can quote their prices in the international markets
80 % of Indian export is cotton based
What do we need
need to make MMF available in International market
leverage on the strength on spinning and garment industries
by strengthening the process and weaving segments
80 % of China export is MMF based
Globally, 65 % of textile and clothing industry consumes MMF , remaining 35 % is cotton based
look for countries that need cotton
Industry is highly segmented
need for better road connectivity
seperate the industries as per key international destinations and power
need to appreciate small and medium scale exporters
need to annouce the drawback prices soon
need to be an export oriented country