Khadi gets separate unique HS code

In a long awaited move to make export of Khadi, exclusively categorized from the general league of textile products, the ministry of commerce and industries has allocated separate HS code for this signature fabric of India this week.

Khadi and Village Industries Commission (KVIC) Chairman Vinai Kumar Saxena said that this decision of government led by Prime Minister Narendra Modi, will open a new chapter in the field of Khadi export. "Earlier, Khadi did not have its exclusive HS code. As a result, all the data regarding export of this signature fabric used to come as a normal fabric under the textile head. Now, we will be able to keep a constant eye on our export figures, which will further help in planning our export strategies" he said.

Khadi and Village Industries products are eco-friendly and natural, and are in great demand in the International Markets. Recognising its potential to generate exports and its eco-friendly importance, the Ministry of Commerce had accorded deemed Export Promotional Council Status(EPCS) to KVIC in 2006, to boost the export of Khadi products. However, in the absence of separate HS code, the export of Khadi products was difficult to categorise and calculate.

KVIC Chairman Saxena was pursuing this matter since 2017 when he wrote letters to the then Minister of State for Commerce and Industries Nirmala Sitaraman. MSME Minister Nitin Gadkari also wrote a letter to the current Commerce Minister Piyush Goyal in September 2019, to consider the request of KVIC for a separate HS code.

The Ministry of Commerce and Industry in a letter dated November 4, 2019 to the KVIC Chairman said, The request for separate tariff lines for Khadi items was taken up by the Ministry of Commerce with the department of revenue, Ministry of Finance. Vide their letter, Ministry of Finance had intimated that upon examination of proposals received from the KVIC, 11 items out of 22 items as requested were found feasible for creation of tariff lines by CBIC. Accordingly vide Section 88(b) of 5th schedule of finance (No 2) Act 2019(23 of 2019) separate tariff lines for Khadi products have been created. In addition, definition of 'Khadi' has also been included in the supplementary notes of customs' tariff.

Referring to the benefits of the move Saxena said, "With this new initiative of the Ministry of Commerce, not only the Khadi products will get boost in exports, but it will also open up livelihood opportunities for the artisans engaged in development of Khadi." The KVIC Chairman added that getting exclusive HS code would have remained a mirage for KVIC, had Nitin Gadkari, Piyush Goyal and Nirmala Sitaraman not taken personal interest in it.