Duty free access for textile products from Bangladesh will adversely hit the domestic industry, according to sources here.
Tirupur Exporters' Association President A. Sakthivel said garments from Bangladesh were likely to flood the domestic market, thereby causing undue hardship to garment makers. When there was a demand compression in the U.S. and the European Union, Bangladesh garment exporters would supply more to the Indian market. Bangladesh had inherent advantages in the cost of manufacturing. It also had an additional advantage in the cost of manufacturing when it permits duty free import of cotton and yarn on a reciprocal basis. To be competitive, the Indian garment industry needed a level-playing field, he said.
D. K. Nair, Secretary General of the Confederation of Indian Textile Industry, said duty free import of 46 textile items (mainly garments) from Bangladesh would affect the garment hubs in the country. So far, garment imports from Bangladesh attracted 10 per cent ad valorem or specific duty, whichever is higher. About 10 million pieces of garments were allowed under zero duty import.
In a recent memorandum to the Prime Minister, Confederation Chairman Shishir Jaipuria said the Bangladesh apparel manufacturing industry was far more competitive than the Indian units.
The domestic garment industry was mostly in the small-scale sector and the operational costs were high here. The labour cost in Bangladesh was one-third of the wages paid to a garment worker in India.
The government should have a pre-condition for the duty-free import that the origin of fabric for these textile products should be India alone.