Textile industry seeks cotton import duty cut as prices surge 25%, output falls short

Pune: The textile industry has approached the government seeking removal of the 11% import duty on raw cotton, after domestic prices rose about 25% in two months and estimates showed production to fall about 10% short of initial expectations this crop year.

Indian manufacturers are struggling to compete with rivals in Vietnam and Bangladesh that enjoy duty-free access to cotton imports, industry bodies said. The demand comes days after the government approved a ₹5,659 crore mission aimed at boosting cotton productivity and improving India's self-sufficiency in the fibre.

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"The 11% import duty was levied on cotton when the country was producing 353 lakh (35.3 million) bales of cotton as against the domestic consumption of 320 lakh bales. During the current cotton season, production has dropped to 291 lakh bales as against the domestic demand of 328 lakh bales," the Southern India Mills Association (SIMA) said.

As per latest government estimate, India's cotton output in the current season will likely be 29.2 million bales.

The association has written to various ministries, including commerce, agriculture and finance, to raise this issue.

Various associations like SIMA, the Tiruppur Exporters' Association and TEXPROCIL have also met commerce minister Piyush Goyal and approached other ministries in the past two weeks.

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"Not only the prices have increased, but we are also facing a shortage of the raw material as raw cotton supply is short by about 40 lakh bales," said KM Subramanian, president of the Tiruppur Exporters Association. The Tamil Nadu town accounts for nearly 70% of India's knitwear exports.