The Government has said there is excess availability of local cotton, and Indian textile and apparel industry should use more of Indian cotton. It will support farmers, as they are hit by a surge in imports.
The cotton import surged significantly in last few years even though India is the largest producer of cotton in the world.
Pankaj Chaudhary, Minister of State for Finance, told Lok Sabha in a written reply to a question that a 5 per cent basic customs duty and a 5 per cent agriculture infrastructure and development cess were imposed on raw cotton in FY22 budget to benefit domestic cotton farmers.
He acknowledged that trade associations have made representations to present the difficulties being faced by textile and apparel industry due to the import duty.
The Minister further added that all varieties of cotton, including those produced in India, were being imported in large quantities. This has impacted the Indian farmer adversely.
Cotton is domestically available in excess of demand. Therefore, the apparel manufacturing industry can source the domestically produced cotton, including high-quality and extra-long staple cotton. The reduced import dependence would help the domestic garment industry.
Chaudhary argued that garment exporters have various duty-free import schemes and would not be affected by the duty on cotton.
The Cotton Association of India and various trade bodies have sought withdrawal of the 10 per cent duty levied on imports saying the commodity has become costly and it was not in the interest of domestic textile industry.