The move by the government is recognition of the fact that these fabrics are being smuggled into the country at under-invoiced values & by misdeclaration of HS codes to evade the MIP of $3.50 imposed previously by the government.
NITMA commends the government’s move to impose BCD of “20 per cent or Rs 115 pkg, whichever is higher†on knitted fabrics falling under chapter 60 on 9 HS codes. However, these 9 HS codes are accounting for only 35 per cent of the total imports of fabrics & remaining 65 per cent of the imports are still left unchecked.
The move by the government is recognition of the fact that these fabrics are being smuggled into the country at under-invoiced values & by misdeclaration of HS codes to evade the MIP of $3.50 imposed previously by the government.
Sidharth Khanna, President of NITMA, while truly applauding the government for taking these active steps to curb the under-invoiced imports of synthetic fabrics & establish a fair competition, humbly appeals to the:
- Ministry of Finance & Ministry of Textiles: To impose BCD on All HS codes falling under chapter 60 of Synthetic Knitted Fabrics as currently only 35 per cent of the total imports are being covered under the 9 HS codes. Furthermore, importers have been jumping HS codes to evade the scope of MIP in the past & will now do so to evade BCD also. This can be easily seen from the fact that total imports of fabric under chapter 60 are increasing despite imposition of MIP, just that imports under MIP codes decreases which is more than compensated by the increase in non-MIP HS codes. So, this 35 per cent volume will be immediately shifted to remaining HS codes.
- Directorate of revenue intelligence & port authorities: To enhance surveillance at all Indian ports to prevent misdeclaration of container HS codes, prices and even weights.
- Enforcement Directorate & CBI: To initiate a comprehensive investigation campaign into the instances of under-invoiced Imports of Synthetic Knitted Fabric (under Chapter 60) & the guilty parties must be brought to justice. All the customs data is available on record & any consignment cleared at less than $3.50 in the past 12 months must be scrutinized & heavy penalties should be imposed on all consignments of knitted fabrics that have been invoiced at the less than $3.50 in the past 12 months under chapter 60 to deter any other party from playing with the livelihood of millions of textile workers.
In conclusion, Khanna expresses his appreciation of the Union Budget 2025-2026, with overall budget allocation hiked significantly by approx. 58 per cent for fiscal 2025-26, primarily due to enhanced allocation of Rs 11.48 billion under the PLI scheme coupled with sharp focus on MSMEs & a 5 Year Cotton Mission with a budget of Rs 5 billion to increase cotton productivity, especially for extra-long staple varieties & several other positive announcements in the budget. He also mentions that with no income tax payable upto Rs 1.2 million will cause a rise in disposable income within the middle and lower classes leading to an increase in consumer spending on apparel. This is expected to have a positive impact on the entire textile value chain. However, he strongly recommends the imposition of new BCD on all HS codes falling under chapter 60.