The sustained increase in the import of dyed knitted fabrics, despite import duty, has raised alarm bells in Tamil Nadu’s textile industry.
Dyed knitted fabrics are used to make all types of garments. During the first five months of the current fiscal year, India imported knitted fabrics valued at $276 million (₹2,270 crore) — or ₹450 crore a month on average — predominantly from China. Dyed knitted fabrics in one HS code alone account for 30 percent of such imports, states Coimbatore-based Indian Texpreneurs Federation (ITF).
The influx of dyed knitted fabrics directly impacts various sub-sectors within Tamil Nadu’s textile manufacturing industry, including spinning, knitting, and processing. ITF covers the entire value chain of textile manufacturing.
Tirupur manufactures around ₹35,000 crore worth of knitwear apparel — t-shirts, innerwear, women’s leggings, and shorts — for exports and ₹20,000 crore* worth of products for the domestic market.
To produce the Rs 50,000 crore worth of finished material, the basic materials like yarn, fabric, and the processing capacity to dye them are available in and around Tirupur. However, when dyed knitted fabric directly enters the market, it affects the units in the spinning, dying processing, knitting,
A preliminary study has shown that most of the imports are facilitated through traders who, in turn, distribute the fabric to domestic garment manufacturers in key hubs such as Coimbatore and Tirupur.
The retail selling price of these dyed fabrics fluctuates between ₹320 and ₹350 per kg in the domestic garment market. Given the 20 percent import duty, the landed cost of the fabrics is concerning. Manufacturing at such price points appears untenable in any part of the world, industry players point out.
They pleaded with the authorities to scrutinize the materials used and ensure the imports are valued correctly, avoiding potential malpractices like under-invoicing or mislabelling with different materials and HS codes.
With numerous spinning mills, and knitting fabric and processing units in Tamil Nadu producing similar fabric, this import surge poses a significant threat to TN textile manufacturers.
