With cotton consumption on the rise India faced the risk of moving away from cotton surplus situation, Textiles Secretary U.P. Singh told presspersons on Thursday.
When asked about removal of import duty on cotton, the Secretary said cotton production during the 2021-2022 cotton season is expected to be 340 lakh bales. With demand shooting up, 1.5 lakh to 2 lakh spindles are added every month in the country and cotton consumption is expected to be high this season.
Cotton prices were at about ₹90,000 a candy and are expected to drop in a day or two with the removal of the duty. However, the prices will not be very low as there is shortage all over. The textile industry has been asking for the removal of the import duty, he said.
Southern India Mills’ Association chairman Ravi Sam said the government announced the import duty on cotton in the Union Budget last year in the interest of the farmers. With the reduction in cotton production during the current season and increased consumption, the industry is likely to face 40 lakhs to 50 lakh bales cotton shortage and hence, demanded for the removal of import duty till the end of the season to sustain its performance. The Indian cotton price was costlier by 7 % to 10% due to the import duty. The Government decision has come at a right time and will protect the interests of the farmers and the industry.
The Cotton Textiles Export Promotion Council chairman Manoj Kumar Patodia said removal of the import duty will benefit entire textile value chain - yarns, fabrics, garments and made ups and provide relief to consumers. He hoped that going forward the prices of cotton which had reached unreasonable levels will stabilise and the textile industry will be able to increase its exports.
T. Rajkumar, chairman of Confederation of Indian Textile Industry, said, “It’s a welcome decision and will help the entire textile value chain fight not only the steep increase in the cotton price due to the imposition of 10% customs duty on the import of cotton but also meet the requirement of specialty cotton (extra-long-staple cotton, organic cotton, coloured cotton, etc.) to manufacture high-end products for their niche markets in advanced countries.” Since the cotton farmers have already sold their cotton crop of present season, allowing duty-free import of cotton will not at all affect the Indian cotton farmers.
Prabhu Dhamodharan, convenor of Indian Texpreneurs Federation, said in the current dynamic and volatile business and trade environment, timely intervention of policy decisions are crucial to the changing needs. Removal of the import duty will help the entire textile manufacturing eco-system, support the overall balance sheet of cotton, and also reduce the speculative trade.
According to the president of Federation of Indian Export Organisations A. Sakthivel, this will push export of apparel and made-up sectors significantly by softening the prices of yarn and fabrics. India has increased its market share in apparel exports in the US and many countries recently. With the support of the government, the textile sector should endeavour to reach $ 100 billion exports by 2030.
Sanjay Garg, president of the North India Textile Mills Association, said the withdrawal of import duty on cotton was sought for quite a while by the domestic textile sector and will make Indian textile products competitive.
