News

TN CM urges Centre to do away with 11% import duty on cotton

Our Bureau | | Updated on: Nov 29, 2021
image caption

He also urged the Cotton Corporation of India reduce the minimum lot size of e-auction of cotton to 500 bales

Tamil Nadu Chief Minister MK Stalin on Monday requested Union Textiles Minister Piyush Goyal to direct the concerned ministries to remove the 11 per cent import duty levied on cotton to avoid further speculation in the coming months.

He also urged the Cotton Corporation of India (CCI) reduce the minimum lot size of e-auction of cotton to 500 bales, which is sustainable for the MSMEs. Further, yarn manufacturers may be given priority over traders in cotton procurement.

Stalin asked Goyal to extend 5 per cent interest subvention to the spinning mills towards procurement of cotton during peak season (December to March). The Chief Minister said he had received representation from apparel manufacturers regarding the grave situation of cotton and yarn price volatility and its impact on the prices of fabrics and garments. The textile industry is the second largest employment provider in the State and accounts for one-third of India’s textile business. The present crisis has led to mass cancellation of export orders and hardships in fulfilling long term export commitments.

If this situation is not reined in, a large number of apparel and home textile units may soon become unviable resulting in closure and consequent largescale unemployment and industrial unrest.

One of the major reasons for the cotton price volatility is the imposition of 5 per cent Basic Customs Duty (BCD); 5 per cent Agriculture Infrastructure Development Cess and 10 per cent Social Welfare Cess imposed on these components in the Union Budget 2021-22 which amounts to imposition of an overall import duty of 11 per cent.

Another reason for spurt in cotton prices is the bulk discount offered by the CCI to the traders who procured almost 70 per cent of Minimum Support Price cotton auctioned by CCI at a lower rate during the cotton season due to availability of 90 days free period and thereafter speculated in the market. Stalin asked the Union Minister to intervene and take policy measures to remedy the situation and protect the textile industry and prevent loss of jobs. “I would be grateful if you could kindly instruct the concerned Ministries to take necessary action in this regard at the earliest,” he added.

Published on November 29, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

COMMENTS
This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you