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The Cotton Textiles Export Promotion Council has expressed surprise over levy of 10 per cent import duty on raw cotton and urged the government to have a relook at the proposal.
Welcoming the Government move to set up seven textile parks over three years, Manoj Patodia, Chairman of The Cotton Textiles Export Promotion Council, said the move to levy import duty on cotton will make imports of Extra Long Staple Cotton costly, especially GizaCotton from Egypt and Supima Cotton from the US. Patodia also expressed his apprehension that the levy of import duty on cotton will increase the domestic prices which will now be based on the import parity price plus the basic customs duty.
This, in turn, will push up cost for value-added products like fabrics, made-ups and garments. He also pointed out that there has been a decline in imports of cotton by a sharp 77 per cent between January and November 2020 compared to the same period in 2019 and as such there is no case for an imposition of import duty on cotton.
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Patodia appealed to the Government to withdraw the basic customs duty on cotton in the interest of the textile and clothing sector and its orderly development, especially as India is a cotton surplus country.
Globally competitive
However, he said the Government move to set up seven textile parks under the ‘Mega Investment Textiles Parks' over three years will enable the textile industry to become globally competitive, attract large investments and boost employment generation, said Patodia.
The Budget has reduced the basic customs duty on caprolactam, nylon chips and nylon fiber and yarn to 5 per cent. This will encourage the growth of the man-made fibre sector, especially the MSMEs, he said.
Also read: Sops for textiles to weave a global success story
On the direct taxes, the Budget has reduced the time-limit for re-opening of assessment to 3 years from the present 6 years to remove the uncertainty for the assessees, he added.
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