Finance ministry to notify import duty hike on 300 textile products to boost domestic manufacturing

New Delhi: The government is likely to hike import duty on about 300 textile products tomorrow with a view to boost domestic manufacturing.

The duties could be enhanced to 20 percent on products like certain fabrics, garments and man-made fibres. Currently, the duty ranges between 5-10 percent.

A notification to this effect is likely to be tabled in Parliament tomorrow, sources said.

Representational image. Reuters.

Increase in duties would give an edge to domestic manufacturers as the imported products are relatively cheaper. Increase in manufacturing activity will help create jobs in the sector, which employs about 10.5 crore people.

Last month, the government doubled import duty on over 50 textile products -- including jackets, suits and carpets -- to 20 percent, a move that is aimed at promoting domestic manufacturing.

Through a notification, the Central Board of Indirect Taxes and Custom (CBIC) had hiked import duties as well as raised the ad-valorem rate of duty for certain items.

The imported products which have become expensive include woven fabrics, dresses, trousers, suits and baby garments.

According to trade experts, India would not be able to give any direct exports incentive to the textile sector, so there is a need to support the segment to encourage domestic manufacturing.

Imports of textile yarn, fabric, made-up articles grew by 8.58 percent to $168.64 million in June.

However, exports of cotton yarn/fabrics/made-ups, handloom products grew by 24 percent to $986.2 million. Man-made yarn/fabrics/made-ups exports grew 8.45 percent to $403.4 million. Exports of all textile readymade garments dipped by 12.3 percent to $13.5 billion.