Indo-Bangla free trade hits Ludhiana textile industry | SupportBiz

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Indo-Bangla free trade hits Ludhiana textile industry

The Ludhiana textile industry is demanding a ban on the free trade agreement between India and Bangladesh over mounting losses. The industry is now faced with reduced demand adding to woes over increased taxation. Prime Minister Manmohan Singh had announced a duty-free regime for textile imports from Bangladesh, especially readymade garments, during the second half of 2011.

The situation has become untenable to an extent that textile mill owners are on the verge of shutting down their units. 

Speaking to Supportbiz, general secretary of Bahadur-Ke Textile and Knitwear Association, Subhash Saini, informed that the textile industry in Ludhiana would wind up very soon if the free trade with Bangladesh continued unabated.

“We have seen a 50 percent reduction in revenue since the free trade agreement took off. None of the industrialists can think of expansion these days, instead many of them are switching over to other businesses”, said Saini.

He said that cheaper labour and yarn, free supply of power and better machinery in Bangladesh helps the industrialists to produce better quality products. Add to this the fact that imports from across the border are cheaper, traders are ignoring local manufacturers.

“We have raised the matter with the government many times but to no avail. We had even shut down units for one month but government seems to be unbothered” claimed Saini.


Talking about the reasons for mounting losses, general secretary of the Knitwear Club, Nirender Miglani said that one of the reasons for it was the 19 percent tax on the import of machinery from Bangladesh adding that they had to spend a lot more to get equipment. He said that every year there is around 12 percent increase in the cost price of garments while they cannot increase the selling price by the same rate.

Another industrialist from Ludhiana, Amardeep Kundra said that the state government should not only waive off the taxes imposed on the import of machinery and supply power at cheaper rates, but it should also appeal for a ban on free trade with Bangladesh.