Cotton Association of India (CAI) has reiterated its request to the Government to withdraw 10% customs duty imposed on cotton since 2nd February 2021.

In a letter addressed to the Hon’ble Finance Minister, Smt. Nirmala Sitharaman, the CAI President, Shri Atul S. Ganatra has made the following submissions:-

The cotton has been under Open General License (OGL) Scheme without any quantitative and qualitative restrictions for last several decades.

India produces merely 5 to 6 lakh bales of ELS cotton against our actual requirement of about 12 to 15 lakh bales of ELS and about 5 to 7 lakh bales of non ELS contamination-free sustainable cotton. India hardly produces this type of cotton and there is a clear shortfall of the same. India requires such ELS and contamination-free sustainable cotton not produced in our country to cater to the international demand.

Due to the imposition of 10% import duty on cotton, this raw material, which is being imported in India, has become costly thus reducing our 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.8500/- to Rs.9000/- per quintal which is higher by about Rs.2500/- per quintal i.e. about 30% higher than the Minimum Support Price. Therefore, the interest of the farmers is not impacted adversely by removal of 10% import duty on cotton.

We, at Cotton Association of India, firmly believe in free trade policy both for export and import of cotton and support no duties to be levied.

Emphasising on the urgent need for withdrawal of import duty, Shri Ganatra stated that if the import duty is not removed, our domestic prices will go up further and create more hardship to the domestic textile sector viz. spinning, weaving and garment industry.

He has urged the Finance Minister that 10% import duty levied on cotton is not in the interest of the nation as it does more harm than good and interest of our domestic textile industry would be served better if 10% import duty levied on cotton is withdrawn immediately.