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