The Cotton Association of India (CAI) urges withdrawal of 10% cotton customs duty

Atul Ganatra, President, CAI has urged Union Finance Minister Nirmala Sitharaman to withdraw the 10 per cent customs duty on cotton imports. The 10 per cent customs duty was imposed on February 2, 2021.

It covered import of cotton varieties extra-long staple (ELS), the export-oriented garments and cotton-madeups,

In its letter, Ganatra said, 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 imposition of 10 per cent import duty has made this raw material costly thus reducing India’s competitiveness vis-à-vis other countries like China, Bangladesh, Pakistan and Vietnam.

Moreover, 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 Rs 9,000 per quintal which is higher by about 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.

Cotton Association of India believes in free trade policy both for export and import of cotton and support no duties to be levied, he added Ganatra warned that if the import duty is not removed, domestic cotton prices will go up further and create more hardship to the domestic textile sector viz. spinning, weaving and garment industry.