By Our Staff Reporter | MUMBAI, JUNE 14
The Southern India Mills’ Association (SIMA), has appealed to the Union Finance Minister to withdraw both the basic customs duty and the agriculture infrastructure development cess levied on cotton to create a level playing field on the raw material front for the Indian Textile and Clothing Industry. Mr. Ashwin Chandran, Chairman, SIMA, while appreciating the bold initiatives of the Finance Ministry in addressing the structural issues in Man-Made Fibres, stated that the import duty on raw cotton would erode the competitiveness the value-added segments that has a business size of around Rs. 50,000 crores in exports and Rs. 25,000 crores in the domestic market.
These segments provide jobs to around 12 lakh people. He said that it has taken over a decade for the Indian textile industry to build up the market share in these segments and with the levy of cotton import duty, we will lose our competitiveness and market share to the competing countries such as Bangladesh, Sri Lanka, Pakistan and Vietnam.
SIMA Chairman stated that the Government might receive around Rs.360 crores per annum as additional revenue on account of the import duty on cotton but will in turn imperil annual GST revenues of around Rs.1800 crores. More importantly, the import duty will not benefit the Indian cotton farmers owing to the negligible volume of imports and the nonavailability of such speciality cottons in India at the moment.
Mr. Chandran informed that bed linen and terry towel exports to USA to the tune of US $ 1200 million and another US$ 500 million to EU countries per annum are predominantly produced out of ELS and contamination free cottons. He has 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 Authorization Scheme.
SIMA Chairman noted 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. Therefore, this duty levied on cotton import during the last budget is a major concern and a huge impediment to our global competitiveness and future growth of our Textile and Clothing Industry.
We are given to understand that the Ministry of Textiles and the Ministry of Commerce and Industry have already recommended the removal of import duty on cotton and the Ministry of Agriculture has also given its nod. Therefore, SIMA Chairman has fervently appealed to the Union Minister for Finance to take steps to withdraw the import duty on a war footing to enable the ailing Indian Cotton Textile Industry to sustain its global competitiveness and achieve a sustained growth rate in the post-COVID period. # (Source: Tecoya Trend)