Cotton’s basic customs tariff and farm infrastructure development cess should be repealed in order to establish a fair playing field for the Indian textile and apparel industries in terms of raw materials. The import tariff on raw cotton will undermine the competitiveness of the value-added segments, which have a business size of about Rs 50,000 crores in exports and Rs 25,000 crores in domestic sales. In these categories, about 12 lakh people are employed,” said Ashwin Chandran, head of The Southern India Mills Association (SIMA), in a statement.
The government may earn about Rs 360 crores per year in additional income as a result of the cotton import tariff, but this may jeopardise yearly GST earnings of approximately Rs 1,800 crores.
“More importantly, the import tariff would not assist Indian cotton producers because the amount of imports is minimal and such specialty cottons are now unavailable in India. Because the majority of Indian textile and apparel exporters are MSMEs, it is nearly hard for them to obtain tariff exemption under the Advance Authorization Scheme,” he noted.
Cotton import duties are not levied by any country in the textile sector, even significant rivals such as China, Bangladesh, Pakistan, Vietnam, and Sri Lanka. As a result, SIMA requested that actions be taken to eliminate the import tariff on a war footing in order for the struggling Indian cotton textile sector to maintain its global competitiveness and achieve a sustainable growth rate in the post-COVID period.
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