On October 27, the Consumer Gazette of India and the Central Bureau of Customs (CBEC) issued a circular on the official website, deciding to raise the tariffs on textile and apparel importations covering the Customs Tariffs 50 to 63 in an all-round way. On the basis of the current 10% -15%, the import tax rate Up to 20% -25%. Textile and apparel products (mainly textile raw materials, 30% import tax rate), which had been taxed at more than 25%, remained unchanged.
China and India are closely linked in trade in textiles and clothing, and China is the first country of origin in India for imported textile and apparel. According to ITC statistics, in 2016, China exported a total of 4.09 billion U.S. dollars of textile and garment exports to India, accounting for 67.3% of the total Indian textile and garment import. The full and substantial increase in India's import tariffs will have a huge impact on China's textile and garment export enterprises.

India textile and garment industry development status quo

Textile industry in India's national economy occupies an extremely important position. India's 2016-2017 Textile Industry Annual Report shows that the textile industry contributes 2% of India's GDP, 10% of manufacturing output and 13% of foreign exchange earnings. Adequate labor resources and textile raw materials, as well as government policy support and other advantages, making the strength of India's textile industry in recent years continue to increase.

Currently, India's cotton production has jumped to the top of the world. According to the USDA, in 2016, the cotton output in India reached 6.096 million tons. Due to the negative influence brought by the non-marketization factors of high-quality cotton raw materials in China, the cotton textile industry in India has witnessed rapid development in recent years. Indian cotton yarn is mainly exported to China, Bangladesh and Pakistan.

↓ India's major textile industry area map

India's textile industry has rich resources of raw materials, complete industrial value chain, strong production cost competitiveness, relatively perfect infrastructure, strong professional and linguistic skills of textile workers, rapid expansion of domestic and international markets, friendly investment policies, and stable socio-political and economic relations Advantage.

At the same time, behind the rapid development, there are many problems in the Indian textile industry. Indian textile enterprises are small-scale, under-invested and relatively dispersed, and the popularization of high-tech production technology needs to be improved, which limits its capacity. Relatively backward management system has also created some obstacles for the development of enterprises. Although nearly 40 billion U.S. dollars in annual exports of textiles and clothing rank second in the world, there is still a long way to go before the first 270 billion yuan worth of exports in China.

India this comprehensive increase import tariffs, China's textile and apparel export business what impact?

In 2016, China exported more than 100 million U.S. dollars to a total of seven textile and apparel products exported to India. These products will face a rate increase of 1 to 1.5 times after the tax rate adjustment.

For the purpose of protecting the development of its own industries and reversing unfavorable trade deficits, India's overall upward adjustment of the import tax rate will have a significant impact on China's textile and apparel exports to India and cause great losses to China's exports to India's textile and garment enterprises. It is recommended that relevant enterprises promptly make preparations for the risk prevention in export orders and trade in a mode of payment-to-delivery to Indian customers.