The increment in basic custom duty on imported garments is a boon for Indian garment industries. The garment industries of India were unable to compete with the incoming cheaper textiles, putting their existence at stake.
Imports from Bangladesh, China, Vietnam, Cambodia, Sri Lanka were unputdownable in recent times. India imported apparel amounting to about $7 billion in 2017-18., which is estimated as an increment of 16% than previous year. Bangladesh alone claimed a major share of this amount. The imports from Bangladesh costs up to Rs. 4983 Crore annually. This scenario is further worsened in the Post- GST period, that is, after July 2017 as the duty on import of readymade garments from Bangladesh was exempted.
China, on the other hand, is another contributor of the cheap textiles flooding Indian markets. It simply set up its garment factories near the borderline countries, utilised availability of cheap labours and the duty free custom exchange with India thereby becoming one of the leading suppliers of apparels in India.
To do away with this malice, the Union Finance ministry has increased the basic custom duty to 20% (previously it was 10%). Grossly, the duty has increased for all the major products which form 26% of all textile imports in India. Alongside, duty on 48 most common imported apparels also show a significant rise. These measures are expected to cut down the Chinese trade.
Though the government is still looking into the possibilities of China using different other policies for duty free custom exchange with India, but the implemented measures have successfully rescued the Indian textile industries from the potential threat of extinction.