Minister of Finance meets with textile industry to discuss high cotton prices

28 January 2022, Mumbai:

Union Minister of Finance and Corporate Affairs Nirmala Sitharaman convened a virtual conference with industry organizations to highlight the need for immediate action to stop the rise in cotton and cotton yarn prices.

R. Gandhi, Minister for Handlooms and Textiles; Tiruchi Siva, Member of Parliament; Dharmendra Pratap Yadav, Principal Secretary, Handlooms, Handicrafts, Textiles and Khadi Department; and Dr. Vallalar, Commissioner (Textiles) were among those who attended the meeting from Tamil Nadu.

The conference was also attended by Dr. A. Sakthivel, President, FIEO; R. Rajkumar, Chairman, CITI; Raja M. Shanmugham, President, Tirupur Exporters' Association (TEA); and other industry representatives.

The discussion focused on the repeal of the 11% import tariff on cotton, the removal of cotton from future trade, and the need to reinterpret the role of the CCI in controlling cotton prices.

Nirmala Sitharaman expressed worry about the impact of the abolition of the cotton import tariff on farmers and demanded that a representation be provided as soon as possible.

Stakeholders also stated that if farmers are harmed, MSP should be enhanced to protect farmers' interests.

Farmers, who are at the beginning of the textile value chain, and garment makers, who are at the end, are both at risk. In addition, there is a requirement to be available at all times during a crisis.

Furthermore, MSMEs make up the majority of the apparel business. Raja M. Shanmugham requested assistance from ECLGS to help MSMEs fulfill their financial needs. The Interest Equalization Scheme will be reinstated, which is an urgent requirement.

Exports of raw cotton and yarn should be discouraged, according to a number of stakeholders. Cotton import duties must be eliminated in order to preserve international balance.

Cotton, as the primary raw material for the whole textile value chain, should not be permitted to be traded on a notional basis on stock markets, as this creates fake demand that affects the entire value chain.

As a result, cotton must be removed from the commodities list.

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