Once again, textile industry has urged Government to withdraw 10 per cent customs duty imposed on cotton since 2 February this year.
The Cotton Association of India (CAI) has made this request to the Central Government.
Atul S. Ganatra, President, CAI, wrote a letter to Union Finance Minister Nirmala Sitharaman and said cotton has been below the open common licence scheme with no quantitative and qualitative restrictions for number of years.
India produces merely 5 to 6 lakh bales of ELS (extra-long staple) cotton, towards the precise requirement of about 12 to15 lakh bales, and about 5 to 7 lakh bales of non-ELS contamination-free sustainable cotton, he stated.
He added that on account of imposition of 10 per cent import duty on cotton, India’s competitiveness is lowering vis-à-vis nations like China, Bangladesh, Pakistan and Vietnam.
It is pertinent to mention here that India hardly produces this type of cotton and there is a clear shortfall of the same. India requires such ELS and contamination-free sustainable cotton, which is not produced in our country to cater to international demand.
Also Read: Textile industry fervently appeals Government to withdraw 10% cotton import duty
Moreover, costs of ELS cotton in India are very high and the ELS kapas rate stands between Rs. 8,500 and Rs. 9,000 per quintal, which is greater by about Rs. 2,500, i.e., about 30 per cent greater than the minimal assist worth (MSP), Atul stated.
“Therefore, the interest of the farmers won’t be impacted adversely by removal of 10 per cent import duty on cotton. If the import duty is not removed, domestic prices will go up further and create more hardship to the domestic textile sector,” Atul added.
Due to this duty, that Government might receive around Rs. 360 crore per annum as additional revenue on account of the import duty on cotton, but will in turn imperil annual GST revenues of around Rs. 1,800 cr.
Source : https://in.apparelresources.com/