The Cotton Association of India (CAI) has reiterated its request to the government to withdraw 10% customs duty imposed on cotton considering that February 2 this year.
In a letter addressed to finance minister Nirmala Sitharaman, CAI president Atul S Ganatra mentioned cotton has been below the open common licence (OGL) scheme devoid of any quantitative and qualitative restrictions for last a number of decades.
India produces merely 5 to 6 lakh bales of ELS (additional-extended staple) cotton, against the actual requirement of about 12 to15 lakh bales, and about 5 to 7 lakh bales of non-ELS contamination-absolutely free sustainable cotton, he mentioned.
“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,” Ganatra mentioned.
Ganatra mentioned due to imposition of 10% import duty on cotton, raw material has turn into pricey, which is lowering India’s competitiveness vis-à-vis nations like China, Bangladesh, Pakistan and Vietnam.
Moreover, rates of ELS cotton in India are incredibly higher and the variety of ELS kapas price is in in between Rs 8,500 and Rs 9,000 per quintal, which is greater by about Rs 2,500 i.e. about 30% greater than the minimum help value (MSP), he mentioned.
“Therefore, the interest of the farmers won’t be impacted adversely by removal of 10% 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,” Ganatra mentioned.