According to Budget announcement, the tariff rate is being revised from 10 per cent/20 per cent to “20 per cent or ₹115 per kg, whichever is higher” on knitted fabrics classified under tariff items 6004 10 00, 6004 90 00, 6006 22 00, 6006 31 00, 6006 32 00, 6006 33 00, 6006 34 00, 6006 42 00 and 6006 90 00. By the virtue of declaration under the Provisional Collection of Taxes Act, 2023, the revised duty rate will come into force with effect from the intervening night of February 1 and February 2, 2025, as Clause 98 (a) of Finance Bill read with Second Schedule refers.
The 2025-26 Budget imposes a 20 per cent or ₹115/kg (whichever is higher) duty on nine types of knitted fabric to curb cheap imports, mainly from China.
Certain shuttle-less looms are now exempt from Basic Customs Duty to boost technical textile sectors like agro textiles, medical textiles, and geo-textiles.
A five-year mission will support cotton farmers.
The Finance Minister also announced to add types of shuttle-less looms to the list of machinery on which Basic Customs Duty (BCD) is exempted. Duty free imports of these types of looms will promote agriculture, medical and geo textiles in the country.
She also said that a 5-year mission will be launched for cotton growing farmers to improve cotton farming, and promote extra-long staple (ELS) varieties. This will ensure steady supply of cotton for rejuvenating India’s textile sector. It will improve productivity and sustainability of cotton, and promote ELS cotton.
Sitharaman also said that an Export Promotion Mission will be set up for facilitating easy access to credit, tackling non-tariff in overseas markets
Sanjay K Jain, Chairman ICC Textiles Committee & Managing Director, TT Ltd told Fibre2Fashion, “It is an effort from the government to block evasion of customs duty on knitted fabric by making it 20 per cent or Minimum Import duty on all HS codes.”
Jain said that overall budget is better than expected for the textile industry. All MSME & Women Entrepreneur Centric Schemes would also benefit the textiles sector as maximum participants fall in this category.
Ludhiana based textile yarn trade Ashok Singhal said, “At the moment about 70 to 80 per cent of HSN codes of knitting fabric imports will be covered for minimum duty of ₹115 per kg. This will restrict import to a great extent.”
Fibre2Fashion News Desk (KK)
