Indian importers order jacquards, fret about duty rates
June 24, 2003
BANGALORE, India – During Heimtextil 2003, Indian importers ordered considerable quantities of jacquard fabrics, in styles and colors that are difficult to find in India. This is a departure from years past when large quantities of American flocks were imported to India. To date, flock imports to India have dropped 90 percent as Indian companies have established better flock production plants and begun selling at internationally competitive prices.
Indian importers also asked for smaller quantities than usual at Heimtextil. The reasons for this are varied and have as much to do with changes in the selling chain as with duty rates. More than 100 important Indian retailers stock a small percentage of imported decorative fabrics and upward of 15 import directly. "Those days are gone when the importer was screened by the exhibitor at Heimtextil for credentials and minimum orders accepted were 150 to 200 meters," said Bipin Shah, Director, Bipin Synthetics Pvt. Limited (Mumbai). Reeling from the onslaught of competition European and American exhibitors welcomed orders for a roll of 50 meters.
The distinction between a retailer and a wholesaler is also diminishing and several importers are engaged do both, noted Deepak Abhichandani of Chaturbuj Ramchandra & Company (Mumbai). According to Mohit Agrawal, business development executive in the Indian sales office of Quaker Fabric Corporation, the market for better goods is growing.
Still, high duties are the biggest obstacle for Indian importers. It's enough to give the importers fits because they believe consumer demand, at the middle and higher end is huge and it is only prohibitive rates that keep goods out of these consumers' hands. Many people in the trade believe India will cut the duty rates to meet WTO rules in the next two years and that a surge imports will follow. But for now the basic custom duty – 25 percent – and other duties and taxes including a minimum rate per square meter valuation by the customs department remains abnormally high. For example, a meter of furnishing fabric costing $2 a meter may end up to costing as much as $5.
Indian importers also asked for smaller quantities than usual at Heimtextil. The reasons for this are varied and have as much to do with changes in the selling chain as with duty rates. More than 100 important Indian retailers stock a small percentage of imported decorative fabrics and upward of 15 import directly. "Those days are gone when the importer was screened by the exhibitor at Heimtextil for credentials and minimum orders accepted were 150 to 200 meters," said Bipin Shah, Director, Bipin Synthetics Pvt. Limited (Mumbai). Reeling from the onslaught of competition European and American exhibitors welcomed orders for a roll of 50 meters.
The distinction between a retailer and a wholesaler is also diminishing and several importers are engaged do both, noted Deepak Abhichandani of Chaturbuj Ramchandra & Company (Mumbai). According to Mohit Agrawal, business development executive in the Indian sales office of Quaker Fabric Corporation, the market for better goods is growing.
Still, high duties are the biggest obstacle for Indian importers. It's enough to give the importers fits because they believe consumer demand, at the middle and higher end is huge and it is only prohibitive rates that keep goods out of these consumers' hands. Many people in the trade believe India will cut the duty rates to meet WTO rules in the next two years and that a surge imports will follow. But for now the basic custom duty – 25 percent – and other duties and taxes including a minimum rate per square meter valuation by the customs department remains abnormally high. For example, a meter of furnishing fabric costing $2 a meter may end up to costing as much as $5.
