AIKA raises concerns over surge in Chinese synthetic fabric imports

AIKA pointed out that there was a substantial 111 per cent rise in the import of synthetic knitted fabrics from China, soaring from 325 tonne per day in 2019-20 to 686 tonne per day in the fiscal year 2023-24.

The All India Knitters Association (AIKA) raised concerns about the exponential increase in imports of synthetic knitted fabrics from China. They highlighted the detrimental impact of undervalued prices, leading to an annual revenue loss of Rs 5,700 crore to the Government of India’s exchequer. AIKA communicated this issue to PK Mishra, the principal secretary to the Prime Minister of India, stressing the urgency of the matter and calling for immediate intervention to protect the domestic textile industry.

In the letter, AIKA pointed out that there was a substantial 111 per cent rise in the import of synthetic knitted fabrics from China, soaring from 325 tonne per day in 2019-20 to 686 tonne per day in the fiscal year 2023-24. Particularly worrisome was the increase in import figures within the HS code 60063200, which saw a significant 148 per cent surge, going from 203 tonne per day to 504 tonne per day during the same period.

AIKA expressed deep concern about the fact that nearly 74 per cent of the imported category under HS code 60063200, described as ‘other knitted or crocheted fabrics of synthetic fibres—Dyed,’ was imported at an average price of $ 1.41 per kilogram. In comparison, the average export price of polyester yarn was $ 1.51 per kilogram. This substantial pricing difference between raw material exports and finished products containing spandex raised significant concerns within the domestic market.

The association highlighted the troubling trend of increasing import volumes along with declining prices, describing the impact as alarming for the domestic industry. AIKA estimated that, based on the import data for the fiscal year 2023-24, there was an evasion of Rs 92 crore per month in duty at the import stage, along with Rs 242 crore per month in evaded GST and Rs 141 crore in evaded income tax, spanning from the importer stage to the consumer stage.

Additionally, AIKA proposed a crucial measure, urging the government to implement import restrictions, such as Anti-Dumping Duty (ADD) or Quality Control Order (QCO), starting from finished products instead of targeting raw materials. This strategic move aligned with the Prime Minister’s ‘Make In India’ policy, which aimed to strengthen local manufacturing and promote indigenous products.