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India: SIMA appeals for withdrawal of 10% import duty on cotton

  

 

Ashwin Chandran Chairman The Southern India Mills AssociationAshwin Chandran, Chairman, The Southern India Mills’ Association (SIMA) appealed for the withdrawal of the 10 per cent import duty on cotton and cotton waste in order to sustain the global competitiveness of Indian textiles and apparel industry and prevent job losses, fall in the exports, and curb cheaper imports of value added products from the SAFTA countries like Bangladesh, Sri Lanka, etc.

Chandran opined, the duty will not benefit the cotton farmers as the normal import of 12 to 14 lakh bales per year accounts only around 3 per cent of Indian cotton production and consumption and such cotton is not produced in India. He added, the duty also defeats the government’s policy of addressing an inverted duty structure in the GST especially in cotton which attracts 5 per cent GST.

The import parity pricing policy being adopted by the indigenous fibre manufacturers during the two decades and the recent removal of ADD on PTA curtails the growth of the MMF textile value chain, he adds. It also affects the competitiveness of predominantly MSME based cotton textiles and apparel industry.

Chandran further stated, the MSME and decentralized nature of the yarn, fabric and garment manufacturers in the country are not in a position to take advantage of Advance Authorization Scheme which benefits only the vertically integrated units that account less than 10 per cent of the exports.

The Government had withdrawn the import duty on cotton during July 2008 consequent to the severe recession faced by the industry and also a Nation-wide bandh by the entire cotton textile value chain. When the import duty was there, the multinationals used to cover major volume of cotton and export and thereafter the industry had to import cotton at higher price and thereby the foreign exchange also got affected, he added. Therefore, he urged the Prime Minster to withdraw the 5 per cent BCD and 5 per cent AIDC and also 10 per cent BCD on cotton waste to sustain the global competiveness of the cotton textile value chain and make Aatmanirbar Bharat vision, a reality.

Chandran hailed the announcement of MITRA scheme aiming at developing seven mega textile park with plug and play facility and facilitate 40 to 50 leading textile players to become global champions. He has stated that Tamilnadu being the largest textile manufacturing State, is planning to develop three mega parks under MITRA, Andhra Pradesh and Telangana State are already having one such park each. He has stated that this would facilitate attracting large scale investments including FDI and JVs.

Welcoming the allocation of Rs700 crore for TUF Scheme and Rs.80 crore for SITP, Chandran hoped that the additional allocations would be made liberally based on the claims filed by the Ministry of Textiles.

 
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