The Indian finance ministry has declined the industry demand to do away with 10 per cent import duty on cotton, saying the move was aimed at benefitting domestic cotton producers, which in turn would boost domestic value addition and reduce import dependence. Garment manufacturers, however, argue that the decision has made export of high-quality clothing uncompetitive in the global market.
“The decision to impose 5 per cent basic customs duty, and 5 per cent agriculture infrastructure and development cess on imports of raw cotton in union budget 2021-22 has been taken to benefit domestic cotton farmers,” finance minister Nirmala Sitharaman told the parliament upper house (Rajya Sabha) in a written reply, while responding to a question on additional import duty imposed on cotton.The Indian finance ministry has declined the industry demand to withdraw 10 per cent import duty on cotton, saying the move was aimed at benefitting domestic cotton producers, which would boost domestic value addition and reduce import dependence. Garment manufacturers, however, argue that the decision has made export of high-quality clothing uncompetitive.#
“Imports of cotton has surged significantly in last few years, even though India is the largest producer of cotton in the world. All varieties of cotton, including those which were produced in India were being imported in large quantities. This has impacted the Indian farmer adversely,” she further said.
The Cotton Association of India (CAI) had earlier urged the government to withdraw the duty. The government has, however, refused to accept their demand, saying many incentives are in place for the garment industry under various schemes.
Fibre2Fashion News Desk (DS)
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