Considering the representations made by the entire cotton textile value chain of India, the Union Government has extended the exemption of 11% import duty on Cotton till 31st December 2026.
Chairman of The Southern India Mills’ Association (SIMA), Durai Palanisamy thanked Prime Minister Modi, and the Union Minister for Textiles, Giriraj Singh, Union Minister for Commerce & Industry, Piyush Goyal, Union Minister for Agriculture, Shivraj Singh Chouhan and Union Minister for Finance, Nirmala Sitharaman for considering the representations.
Mr.Palanisamy said that the industry could import around 72 lakh bales of cotton that will help in mitigating the cotton shortage, avoid job losses and meet export commitments. Recollecting how Cotton Import Duty came into existence, he shared in a press release that India was a cotton surplus country from 2008-2021 and the situation did not require cotton imports.
The country produced more and had enough to export to other countries too. “There was a logic for the Government to levy import duty when the country was net exporter,” he said. However post the 2021 season, India witnessed cotton shortage, and it had to import cotton to meet the demands, and the Government had to give temporary exemptions from year 2022 to mitigate cotton shortage and avoided job losses.
In the current cotton season, India is expected to produce around 280 lakh bales of cotton while the industry requires around 360 lakh bales. It is essential to ensure smooth supply of required quality and quantity of cotton at an internationally competitive price to take real advantage of the recently concluded FTAs including UK, EU & USA.
As it might take 7 to 10 years for India to reach self-sufficiency in medium and long staple cotton while it will continue to depend on imports for ELS cotton and other customer-specified origin cotton, Mr.Palanisamy appealed to the Prime Minister to intervene and grant import duty exemption for all varieties of cotton till 2030.
He also requested the Union Govt to review the same thereafter to curb price speculation, bring price stability, ensure level playing field, take advantage of the new market opportunities emerging out of FTAs and enable Vikshit Bharat.
