19 April 2023, Mumbai
The Indian textile industry, which heavily relies on cotton, is facing a crisis due to sluggish demand and high volatility in cotton prices.
The 11% import duty on cotton imposed during the Union Budget 2021-22 has increased domestic cotton prices and eroded the industry's competitiveness. To bridge the supply-demand mismatch, spinning mills opt for imports during the off-season, but this has become unviable due to the import duty.
The Government had given an exemption to cotton from an 11% import duty from April 2022 to October 2022, which greatly benefited the industry.
However, the industry is now facing a shortage of cotton, and SIMA is appealing to the Finance Minister to exempt cotton from 11% import duty during the off-season to ensure raw material security, avoid mass production stoppage, and revive the export performance of the industry.
The Chairman of SIMA has also requested an exemption for ELS cotton from import duty on a long-term basis.
