The Indian Cotton Federation has urged the Union government to immediately abolish the import tax on cotton.
In a memo to the Union Textiles Minister, J. Thulasidharan, president of the Federation, claimed that because Indian cotton prices are around 15% higher than those in the rest of the world, the domestic textile industry’s access to cotton is severely hampered. The imposition of an import charge on cotton has distorted cotton prices in India and prevented trade and industry from importing the raw material.
Due to the high cost of raw materials and the absence of an equal playing field, the Indian textile sector now operates at approximately 50% to 60% of its potential. Due to little pricing disparities, the industry, which competes with other textile-producing countries, is losing business. In such a case, it would be nearly impossible for the industry to absorb the price distortion brought on by the 11% import charge. The sector only imports cotton when it is absolutely necessary. But he added that the import tax must be eliminated in order to maintain a stable price environment and to compete globally.