Second-hand clothing, customs duties, rising costs: triple burden on Syria’s garment industry

Workshops producing garments in the Syrian cities, such as the city of Hama as one example out of many others, are experiencing one of the toughest moments in years due to the growing competition from the clothes that come in by imports, especially used clothes (clothes in bales).

Industry professionals say that the government's open-market policy, in the absence of measures that ensure a fair balance between locally manufactured and imported products, has flooded the market with low-priced imported clothing that local manufacturers struggle to compete with, despite the often-superior quality of domestic products.

Industrialists Monther Arhim and Majd Sukari stated that garment workshops are currently facing multiple challenges, beginning with the high cost of imported fabrics, yarns, and accessories, and extending to the rising expenses of electricity, fuel, and transportation. As a result, profit margins have declined significantly, forcing some workshops to reduce production or shut down part of their operations.

They added that customs duties on production inputs place an additional burden on manufacturers, even though most of these materials are not produced locally. They called for a revision of the customs tariff structure to distinguish between raw materials used in manufacturing and imported finished goods, a move they believe would help protect domestic industry and strengthen its competitiveness.

According to Syria’s new customs tariff, which came into effect at the beginning of June, many imported textile yarns and fabrics used in garment manufacturing are now subject to a 10% customs duty.

Industrialists emphasize that the problem extends beyond customs duties alone. The cumulative costs associated with imports, including shipping, insurance, customs clearance, and domestic transportation, significantly increase the final production cost of locally manufactured garments. They therefore called for these costs to be reduced or eliminated wherever possible.

These demands are consistent with proposals made in recent months by the Textile Industries Committees of the Damascus and Rural Damascus Chamber of Industry, which discussed the negative impact of higher customs duties on imported yarns and fabrics. The committees stressed that production costs in Syria have become higher than those in many competing countries and called for a restructuring of customs duties imposed on manufacturing inputs.

In a statement issued in February, the Damascus and Rural Damascus Chamber of Industry also urged the adoption of zero or reduced customs duties on raw materials that are not produced locally, while imposing balanced tariffs on imported finished products. The Chamber argued that supporting production inputs is the key to restoring the competitiveness of Syrian industry in both domestic and international markets.

In the same context, Syrian media quoted Mohammad Fawaz Al-Aqqad, a member of the Board of Directors of the Damascus Chamber of Commerce, as saying that approximately 95% of the inputs used in Syria’s garment industry are imported due to the absence of local alternatives. Consequently, any increase in customs duties or import costs is directly reflected in the price of the final product and undermines its ability to compete.

Manufacturers in Hama believe that the continued influx of large quantities of second-hand clothing ("bale" clothing) and low-priced imported ready-made garments creates unfair competition for local producers, particularly given the substantial difference in production costs between Syrian workshops and factories in exporting countries.

Industrialists Monther Arhim and Majd Sukari called for a comprehensive review of economic policies affecting the textile sector. Their proposals include reducing or eliminating customs duties on raw materials, improving access to energy, upgrading logistics infrastructure, and introducing export incentives that would enable Syrian products to regain access to foreign markets, particularly neighboring countries that once absorbed a significant share of Syria’s garment exports.

The necessity to facilitate export processes and open new markets was also highlighted to compensate for the current slowdown in demand on the domestic market. They mentioned the fact that the Syrian producers have enough experience and can manufacture competitive products if they work in conditions which are favorable for their business.

On the other hand, some industrialists and craftspeople said that industrial, craft, and commercial chambers should take more active part in expressing the interests of this sector to the government officials and in finding compromise between the trade liberalization and protection of national industries. They said that the garment industry is one of the most labor intensive branches in Syria, which creates tens of thousands of jobs from the stage of spinning and manufacturing of textiles to sewing, embroidery, printing, wholesale, and retail trade.

The economists stated that the constant increase of the cost of production combined with low purchasing power of Syrians could drive even more small and medium workshops out of business unless some economic measures are taken urgently. These measures should solve the problem of the energy crisis and should reconsider the customs duties on raw materials.

ANHA