The Southern India Mills’ Association (SIMA) has fervently appealed to the Union Finance Minister to withdraw the 10 per cent cotton import duty as it is severely hurting the global competitiveness of the Indian textile and apparel industry.
Industry strongly believes that import duty on raw cotton would erode the competitiveness of the value-added segments that have a business size of around Rs. 50,000 crore in exports and Rs. 25,000 crore in the domestic market.
Ashwin Chandran, Chairman, SIMA said that Government might receive around Rs. 360 crore per annum as additional revenue on account of the import duty on cotton, but will in turn imperil annual GST revenues of around Rs. 1,800 crore.
More importantly, the import duty will not benefit the Indian cotton farmers owing to the negligible volume of imports and the non-availability of such speciality cottons in India at the moment.
He stated that bed linen and terry towel exports to USA to the tune of US $ 1,200 million and another US $ 500 million to EU countries per annum are predominantly produced out of ELS and contamination-free cottons.
He pointed out that since the Indian textiles and clothing exporters are predominantly MSMEs, it is practically impossible for them to avail duty exemption under the Advance Authorisation Scheme.
It is also pertinent to mention here that none of the countries in the global textile trade including our major competitors such as China, Bangladesh, Pakistan, Vietnam and Sri Lanka, levy an import duty on cotton.