Textile Industry

Textile Industry Faces Crisis from Under-Invoicing: NITMA

Published: January 23, 2025
Author: HFT

The serious problem of under-invoiced imports of synthetic knitted textiles, which is causing irreparable harm to the indigenous textile industry, has been brought to light by the Northern India Textile Mills’ Association (NITMA).

In an effort to resolve the issue and prohibit the under-invoiced imports of synthetic knitted fabric (under Chapter 60) and the misdeclaration of HS codes at Indian ports, NITMA has respectfully appealed to Prime Minister Shri Narendra Modi Ji today.

The list of importers affecting these cheap fabrics, who are evading HS codes to import the fabric at a price of about $1 per kg although the genuine pricing is between $4-6/Kg internationally, was part of the request made by Mr. Sidharth Khanna, President of NITMA.

It is important to note that the government extended the Minimum Import Price (MIP) of US$ 3.50 per kilogram for 13 particular HSN codes of synthetic knitted textiles earlier this month, until March 31, 2025.

While sincerely congratulating the Ministry of Textiles and the Ministry of Commerce & Industry for enforcing a Minimum Import Price (MIP) through March 31, 2025, Mr. Khanna also pointed out that, in spite of the governments’ admirable and unrelenting efforts to stop these cheap imports, the following figures show that import quantities have been rising rather than falling.

The aforementioned data unequivocally shows that importers have switched to other Non-MIP HS codes within chapter 60 after the introduction of Minimum Import Prices (MIP). The present approach to implementing MIP on particular HS codes is no longer effective as a result of this change.

He added that the textile industry is suffering greatly as a result of these under-invoiced imports, which is leading to the closure of the knitting, spinning, and dying sectors. As a result of avoiding both direct and indirect taxes, the exchequer has lost more than INR 10,000 crore. Oddly, logistics firms are the biggest importers of synthetic knitted fabrics, with Nandiambakkam Sez (Chennai) accounting for the majority of imports.

Finally, Mr. Khanna respectfully urged the Honorable Prime Minister to step in and start a thorough investigation campaign into these cases of mis-declaration of HS codes at Indian ports and under-invoiced imports of synthetic knitted fabric (under Chapter 60). Importers who have flagrantly broken trade laws must receive a strong message in order to preserve the integrity of the Indian trading system. Their activities undermine market trust in addition to jeopardizing fair competition.

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