CITI hails withdrawal of import duty on Cotton

New Delhi, Thursday, April 14, 2022: Shri T. Rajkumar, Chairman, CITI thanked the Hon’ble Prime Minister, Shri Narendra Modi Ji, Hon’ble Union Minister of Textiles, Shri Piyush Goyal Ji, Hon’ble Union Minister of Finance, Smt. Nirmala Sitharaman Ji, Hon’ble Union Minister of Agriculture & Farmers’ Welfare, Shri Narendra Tomar Ji, Hon’ble Minister of State for Textiles & Railways, Smt. Darshana Vikram Jardosh Ji and all the concerned senior government officials for their kind support for withdrawing 10% import duty on Cotton – 5% Basic Customs Duty (BCD) and 5% Agriculture Infrastructure and Development Cess (AIDC), including 10% Social Welfare Cess (SWC) on both amounting to 11% import duty on cotton – from 14th April 2022 to 30th September 2022.

Shri T Rajkumar said, “it’s a welcome decision and will help the entire textile value chain to fight not only the steep increase in the cotton price due to the imposition of 10% customs duty on the import of cotton but also to meet the requirement of specialty cotton (extra-long-staple cotton, organic cotton, colored cotton, etc.) to manufacture high-end products for their niche markets in advanced countries”.

CITI Chairman stated that he recently met the Hon’ble Minister of Textiles, Shri Piyush Goyal Ji and Hon’ble Minister of State for Textiles & Railways, Smt. Darshana Vikram Jardosh Ji along with Chairman, Apparel Export Promotion Council (AEPC), Chairman, The Cotton Textiles Export Promotion Council (TEXPROCIL), Chairman, The Southern India Mills’ Association (SIMA) and President, Tirupur Exporters Association (TEA) and apprised the Hon’ble Ministers about the issues cropping up due to the non-availability of quality cotton to the domestic players at competitive prices.

CITI Chairman further stated that we also apprised the Hon’ble Ministers that as per the industry estimates, the duty-free import will not exceed 40 lakh bales during the current season. Moreover, it will take three to four months’ time for the imported cotton to reach the Indian textile mills.  Since the cotton farmers have already sold their cotton crop of present season and are preparing for sowing for the next season, allowing duty-free import of cotton will not at all affect the Indian cotton farmers.  The meetings were fruitful, and the Hon’ble Ministers assured the delegation that their problems will be resolved at the earliest.

Shri T. Rajkumar further pointed out that MSME segments, including Handloom, Powerloom, Independent Knitting, Weaving, Processing, Garmenting and Made-up, which accounts for over 80% of the total exports have no access for Advance Authorization Scheme and duty-free import of cotton. These are the worst-affected segments, and their capacity utilization has already dwindled down to below 70%, resulting in huge job losses and a declining trend in the GST revenue.” The Government’s decision to exempt cotton import will boost their sentiments, and help the textile industry to maintain their growth momentum.

CITI Chairman hoped that the T&C Industry would be able to achieve the export target of US$ 16.96 billion (25% increase) set for the cotton value chain and the total textiles and clothing’s export target of US$ 47.029 billion (18% increase) set for the financial year 2022-23 with the help of availability of cotton fiber and other raw materials at internationally competitive prices to the Indian T&C Industry.

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