CAI urges Indian govt to remove import duty on cotton
The Cotton Association of India (CAI) has written a letter to the Union Finance Minister Nirmala Sitharaman for the withdrawal of 10% customs duty imposed on cotton imports on February 2, 2021.
Ahmedabad, Gujarat
The
Cotton Association of India (CAI) has written a letter to the Union Finance
Minister Nirmala Sitharaman for the withdrawal of 10% customs duty imposed on
cotton imports on February 2, 2021. In the letter, Atul Ganatra, President,
CAI, said that India produced merely 5-6 lakh bales (each of 170 kg) of ELS
variety of cotton as against the local requirement of about 12 to 15 lakh bales
of ELS and about 5-7 lakh bales of non ELS contamination-free sustainable
cotton.
The
cotton has been under Open General License (OGL) Scheme without any
quantitative and qualitative restrictions for last several decades.
Prices
of ELS cotton in India are very high and the range of ELS Kapas rate in the
country is in between Rs 8,500 to 9,000 per quintal which is higher by about Rs
2,500 or about 30 per cent than the Minimum Support Price (MSP). Therefore, the
interest of the farmers is not impacted adversely by removal of 10% import duty
on cotton, Ganatra said.
Emphasising
on the urgent need for withdrawal of import duty, Ganatra stated that if the
import duty is not removed, the domestic prices will go up further and create
more hardship to the domestic textile sector viz. spinning, weaving and garment
industry. Cotton prices in the domestic markets have already gone up from Rs
43,600 per candy (each of 356 kg of processed ginned 29.5 mm cotton) in January
2021, to Rs 51,800 per candy now, indicating nearly 20 per cent rise in the
prices.
CAI has expressed concerns of
India losing its competitiveness to China, Pakistan and Bangladesh in the
international market. With 10 per cent customs duty on cotton varieties
including extra-long staple (ELS), the export-oriented garments and cotton-made
ups become costlier.
Source: The Hindu Business Line
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