The government's decision to waive customs duty on cotton imports will help boost exports of value-added products of textiles, Federation of Indian Export Organisations (FIEO) President A. Sakthivel said on Thursday.
The move, he said, would promote exports of apparel and made-ups sectors significantly by softening the prices of yarn and fabrics as well.
The Finance Ministry on Wednesday waived customs duty on cotton imports till September 30, a move expected to benefit the textile industry and lower prices for consumers.
Prior to the exemption announcement, cotton imports attracted 5% Basic Customs Duty (BCD) and 5% Agriculture Infrastructure Development Cess (AIDC). The industry had been demanding a duty waiver to lower domestic prices.
The Central Board of Indirect Taxes and Customs (CBIC) notified the exemption from customs duty and AIDC for import of cotton.
“Cotton textile exports will get a further boost as the high prices of cotton were blunting the competitive edge,” Mr. Sakthivel said.
He added that India had increased its market share in apparel exports to the U.S. and many other countries recently and the signing of the free trade pact with the UAE and Australia would further accelerate the trend.
“The government has provided all support to the textile sector and we should endeavour to reach $100 billion of textile exports by 2030,” he said.