India's fabric imports from China triple, urgent need of interim ADD

Fabric imports from China surged, reaching 400 tons in 2020-21, 527 tons in 2021-22, and 568 tons in 2022-23. This figure skyrocketed to 887 MT during the first quarter (April-June) of the current fiscal 2023-24, according to trade data from the ministry of commerce and industry. 

An analysis shared by industry sources revealed that the average price of fabric imports stood at $2.35 per kg in 2019-20. However, it steadily declined in an attempt to capture the Indian market. The average price dropped to $1.82 per kg in 2020-21, further to $1.58 per kg in 2021-22, and even lower at $1.47 per kg in 2022-23. In the first quarter of the current fiscal, the average prices decreased even further to $1.40 per kg. 

Total imports of knitted fabric reached 58.238 million kg (valued at $81.760 million) in the first quarter of fiscal 2023-24. This suggests that inbound trade could potentially reach 230 million kg by March 2024. In previous years, imports were recorded at 73.984 million kg ($173.950 million) in 2019-20, 103.172 million kg ($187.640 million) in 2020-21, 133.676 million kg ($211.640 million) in 2021-22, and 140.362 million kg ($205.760 million) in 2022-23. 

Industry sources have revealed that approximately 95 per cent of fabric was imported at a rate of $1.50 per kg during the first quarter of the current fiscal. This translates to an imported value of just ₹125 per kg. With yarn prices expected to stabilise at only ₹87 per kg, which accounts for 70 per cent of the raw material cost of fabric, it becomes clear that domestic weaving and spinning industries are facing severe challenges in sustaining their operations at these import price levels. 

Sanjay Jain, Managing Director of TT Limited and Chairman ICC Textiles Committee, told Fibre2Fashion, “There is an urgent need to impose an interim anti-dumping duty, as the domestic industry cannot afford to wait for a lengthy investigation procedure. This issue should be given top priority.” 

The domestic market for yarn and fabric is currently facing a significant challenge due to weak demand, both domestically and globally. Traders believe that the domestic demand for garments is also quite weak, largely attributed to the substantial imports of fabric and garments. Trade sources have pointed out that the economic recession in the Western world has redirected supplies of fabric and garments from China to India at lower prices. Consequently, these imports are impacting sustained domestic demand during the current festival season. 

ALCHEMPro News Desk (KUL)