CITI pitches for removal of import duty on cotton to avert crisis for domestic industry

Confederation of Indian Textile Industry(CITI) on Tuesday appealed to Prime Minister Narendra Modi for removal of import duty on cotton to safeguard the domestic industry, observing that cotton prices in India have surpassed the international ones.

The confederation stated that skyrocketing cotton price has stalled the potential growth of the textile value chain and is causing uncertainties under the current market scenario.

''The cotton price that prevailed at Rs 37,000 per candy of 355 kg during September 2020, increased to Rs 60,000 during October 2021. During November 2021, the price varied between Rs 64,500 and Rs 67,000. The cotton price reached its peak level of Rs 70,000 per candy on December 31, 2021,'' CITI said.

The textile industry body argued that consequent to the levy of 5 per cent BCD (basic countervailing duty), 5 per cent agriculture infrastructure development cess (AIDC) and 10 per cent Social Welfare Cess on both amounting to 11 per cent import duty on cotton in Budget 2021-22, the Indian cotton price started ruling higher than international price for the first time.

This caused hardships for exporters in fulfilling export commitments and taking further orders.

CITI Chairman T Rajkumar said only around 121 lakh bales of cotton had arrived in the market as on December 31, 2021 as against 170-200 lakh bales that normally arrived during the earlier seasons, observing that the arrival of 121 lakh bales indicates a supply shortage.

He stated that as the farmers are holding the cotton, the mills have started facing a shortage of good quality cotton.

''Therefore, CITI Chairman has pleaded with the Prime Minister to remove the import duty levied on cotton as the domestic cotton price has exceeded the international price and the kapas price is ruling around 65 per cent higher than the minimum support price,'' the industry body stated.

It said this was crucial to help the highly labour and export intensive textile industry to gain global competitiveness and prevent a crisis.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)