The Indian Texpreneurs Federation has said cotton should not attract import duty next cotton season, which starts in October, in a move to bring stability to cotton prices.
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According to Prabhu Dhamodharan, convenor of the Federation, the Indian textile and apparel sector is facing “turbulence” due to “historic high cotton prices” combined with demand contraction in developed markets. The textile and apparel industry is hoping for a robust Indian cotton crop in the new season. Global opportunities are high for Indian textile exporters as overseas buyers are looking at alternative suppliers for China. “We (the industry) may miss these opportunities if we are not price competitive,” he said.
The Federation conducted a survey recently among 200 textile and apparel units in Tamil Nadu across the value chain. Almost 99 % of the entrepreneurs mentioned that cotton import duty will make Indian cotton prices artificially higher than international prices in the upcoming (2022 - 2023) cotton year and 81 % of the participants mentioned that Indian farmers are not the real beneficiaries of the import duty.
Lack of authentic data on cotton or a scientific data collection method are pain points for the cotton sector. “This is helping speculative traders and trade. Further, imposition of import duty is adding strength to the speculative trade,” he said in a press release.
The government should not re-introduce import duty on cotton, should get data on exact number of cotton bales produced from the information shared by ginners and should instal smart meters in ginning mills to get real time pressing data, he said.