COIMBATORE: Welcoming some key announcements like the National Fibre Scheme, setting up of mega textile parks, Samarth 2.0 to modernise and upgrade the textile skilling ecosystem, the textile sector pressed the Union government to scrap the 11 per cent import duty on all varieties of cotton.
Removal of 11 per cent import duty on cotton is essential to meet the quality cotton shortage and meet export commitments. “Cotton price has already increased by around five per cent, when compared to the international price and is 15 per cent higher than Brazilian cotton. The price gap is likely to widen in the coming months and would affect the financial viability of the entire textile value chain that provides direct jobs to around 35 million people and accounts for around 75 per cent of the total textile and clothing exports,” said Durai Palanisamy, chairman of The Southern India Mills Association (SIMA).
Pointing out that a farmer is fully protected under the Minimum Support Price (MSP), which is almost 20 per cent higher than the international cotton price, Durai said that imports never affected farmers. India could export 30 to 100 lakh bales of cotton per year during the season, and the industry could import cotton during the off-season, enabling a win-win strategy for all stakeholders. Therefore, the 11 per cent import duty on all varieties of cotton should be removed,” he added.
Echoing similar concerns, M Jayapal, chairman of the Recycled Textile Federation, said the government’s decision to retain the 11 per cent import duty on cotton has restricted access to raw materials at competitive international prices. “The failure to reduce the GST on job-work units from 18 per cent to five per cent has also dealt a setback to the entire textile value chain,” he said.
Meanwhile, A Sakthivel, chairman of the Apparel Export Promotion Council (AEPC), hailed the budget for its strong emphasis on improving liquidity and facilitating exports, particularly through customs-related reforms and simplified documentation procedures. He said these measures would reduce transaction costs, enhance operational efficiency and significantly improve the overall ease of doing business for exporters.