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Govt hikes import duty on 328 textile items to boost domestic production

Govt hikes import duty on 328 textile items to boost domestic production

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

In yet another move to boost domestic manufacturing, the government on Tuesday doubled import duty on as many as 328 textile products to 20 per cent. Minister of State for Finance Pon Radhakrishnan yesterday tabled a notification in the Lok Sabha which said that the govt seeks to "increase customs duty on 328 tariff lines of textile products from the existing rate of 10 per cent to 20 per cent...under Section 159 of the Customs Act, 1962".

The government expects that the increase in duties would give an edge to domestic manufacturers as imported products are currently cheaper. And increase in manufacturing activity will help create jobs in the sector, which employs about 10.5 crore people.

Last month, the government had doubled import duty on over 50 textile products - including jackets, suits and carpets - to 20 per cent, a move that was aimed at promoting domestic manufacturing. Through a notification, the Central Board of Indirect Taxes and Custom had raised import duties as well as the ad-valorem rate of duty for certain items.

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 per cent to USD 168.64 million in June.

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

Earlier this month, it was reported that the government was planning to increase import duties on consumer durables. The move is expected to bring down the import, boost the domestic manufacturing and create jobs which is what Prime Minister Narendra Modi wanted when he rolled out flagship 'Make in India' programme.

(With inputs from PTI)