An adjustment to the duty structure in the upcoming Union Budget is likely to provide relief for the $200 billion Indian clothing and textile industry. Senior government officials were quoted in the report as adding that the changes to the textile duties will enable Indian vendors compete in the Western markets.
The government has received numerous requests for assistance from the textile industry, which claims that high cotton costs are a problem. This FY, Indian cotton prices reached a record high of Rs 1 lakh per candy at one point, most likely because to an imbalance between supply and demand. The sector claims that a halt in cotton yarn exports, a crucial raw material, as a result of declining worldwide demand, has also restricted its options.
Prices are anticipated to continue high until the start of the 2019 cotton season.
According to the official, “Our thinking is to avoid inverted [duty] structures in trade and to make sure that, if it is essential to import raw materials, the price should not be high, which will make our end product uncompetitive.”
“In the meantime, we are putting novel farming methods into practise to increase cotton yield.
In cooperation with the industry, branding efforts are also made for Indian cotton varieties such as “Kasturi cotton,” which will benefit the sector in the long run. Free trade agreements will expand the markets for Indian textile products, particularly with the EU, UK, and Australia “the representative stated.
The Cotton Association of India’s president, Atul S. Ganatra, requested a waiver of import taxes. “Cotton imports will be subject to an 11% tariff starting of February 2, 2021. As a result, our value-added products are no longer as competitive on the global market, and our textile sector, which is the second largest employer in the nation, is now only able to operate at half of its installed capacity.”
The attitude was mirrored by Chandrima Chatterjee, secretary general of the Confederation of Indian Textile Industry (CITI). “We have been requesting the abolition of cotton duty. primarily on extra-long-staple cotton, which India lacks, due to the pressure on cotton pricing.”
