The exemption will be available from June 1 to October 31
NEW DELHI: The government on Saturday announced a five-month duty exemption on all cotton imports into the country, aiming to calm prices and ensure the domestic apparel and textile industry remains strong.The exemption will be available from June 1 to October 31 amid demands from the industry to ensure adequate supplies at a reasonable cost, the ministry said in a notification.“The temporary exemption from customs duties is expected to reduce input costs in the textile and apparel sector, thereby providing targeted relief to manufacturers and consumers, while also taking into account the interests of local farmers. Overall, this measure is expected to have a positive impact on the performance of the local textile industry, especially SMEs, ensuring better availability of cotton in the market,” the Finance Ministry said.Cotton is the dominant input of Indian textile exports and is one of the largest items in the export basket.“This measure, implemented during the cotton season, will ensure adequate availability of cotton for the textile industry, support small and medium enterprises, moderate input costs, and enhance the competitiveness of Indian textiles while protecting the interests of farmers and ensuring market stability,” the Textile Ministry said.
The industry seemed relieved. “This will cushion cotton prices, thereby bringing down input costs in the textile and apparel sector, thereby providing much-needed relief to SMEs in the manufacturing industry facing challenges due to sharp increase in prices of cotton and yarn. This timely intervention will also help the apparel industry retain its export competitiveness in cotton-based products,” said Mithileshwar Thakur, Secretary General, Apparel Export Promotion Council.The Confederation of Indian Textile Industry (CITI) said the 11% import duty on cotton was a major hurdle for the Indian textile and apparel sector as major Asian competitors had duty-free access to cotton.“Cotton imports are largely based on quality and specifications, catering to specialized requirements and successive export orders. They do not replace domestic cotton,” CITI Chairman Ashwin Chandran said in a statement.