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Indian garment industry could suffer due to import ban on Chinese goods: Report.

Date: 04-07-2020
Subject: Indian garment industry could suffer due to import ban on Chinese goods: Report
The garment industry could suffer severe repercussions if India’s unofficial ban on Chinese imports continues. Items such as machines parts, buttons, sewing machines, metal accessories and spares are largely imported from the neighbour and manufacturers are awaiting consignments.

Case in point: Garment hub Tirupur is dependent on China for 90 percent of ‘crucial accessories’ such as sewing machines, fasteners, needle lapel pins, buttons and textiles, Raja Shanmugam, President of the Tirupur Exporter Association told The Economic Times.

Shanmugam pointed out that tonnes of goods are stuck at entry points such as ports, and unless manufacturers are able to source alternatives from other markets within time and at a similar cost, the logjam “could hurt the industry”.

"Pre-paid orders of around 500-600 containers are stuck at ports. Close to 15-20 percent of our export clients prefer procuring those accessories from China, for the sake of uniformity and price," Raja added.

As per insiders, while alternatives for some items are available, others are made only in China. For example, textiles can be alternatively sourced from Turkey, Vietnam, Thailand or Taiwan; but machine spares are available only from China.

The apparel sector, which exports for foreign brands are also up in arms as orders are being delayed sue to hold up of accessories at ports. One manufacturer said branding tags and materials, zippers and special buttons for international brands are among the items produced and shipped in from China, but these are now being held up.

Pricing is also among the major factors. RK Hosiery's Roop Kumar told the paper, “China is the cheapest. We are dependent on China from a small needle to fabric glues.” He however, added that these materials can be produced in India – with “enormous support from the government."

India launched an unofficial import ban on Chinese goods and products after soldiers from both countries clashed along the Line of Actual Control (LAC) in Ladakh, leading to the death of 20 Indian Army personnel.  All items coming in from China are now subject to 100 percent manual checks by the Customs Department at points of entry such as ports and airports – the exception being goods ordered by US and South Korean companies.

Source:- moneycontrol.com

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