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Textile, yarn firms demand duty free cotton imports on dwindling supplies

Cotton textile and yarn maker firms have once again called upon the government to immediately allow duty free import of raw cotton.

An Indian industry delegation comprising members of the National Committee on Textiles and Clothing (NCTC) recently met minister of textiles Piyush Goyal and submitted a joint memorandum to allow duty-free import of cotton not only to tide over the present crisis but also to achieve the desired target set for the domestic textile and clothing industry for fiscal 2022-23.
Levying 11 per cent import duty on cotton is affecting global competitiveness of the Indian textile and clothing industry as cotton traders are adopting an import parity pricing policy, it said.
From January this year, Indian cotton’s price is at ₹15 to ₹20 per kg higher than the international price. Therefore, the industry is compelled to import high quality extra-long-staple cotton, sustainable cotton, and contamination free cotton by paying 11 per cent duty to meet export commitments, whereas competing countries enjoy the advantage of duty-free import of cotton, the delegation said.

Micro, small and medium enterprises, including handloom, power loom, independent knitting, weaving, processing, and made-up segments that account for over 80 per cent of the exports, have no access to advance authorisation scheme and duty-free import of cotton. These are the worst affected segments and their capacity utilisation has already dwindled down to below 70 per cent, resulting in huge job losses and a declining trend in the goods and services tax (GST) revenue, the delegation noted.

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