Minister of state for finance Pankaj Chaudhary said a 5% basic customs duty and a 5% agriculture infrastructure and development cess was imposed on raw cotton in FY22 budget to benefit domestic cotton farmers

The government on Monday said there is excess availability of local cotton, which the textile and apparel industry should tap into and support farmers hit by a surge in imports.

Minister of state for finance Pankaj Chaudhary told Lok Sabha in a written reply to a question that a 5% basic customs duty and a 5% agriculture infrastructure and development cess was imposed on raw cotton in the FY22 budget to benefit domestic cotton farmers.

Chaudhary said cotton import surged significantly in the last few years even though India is the largest producer of cotton in the world.

“All varieties of cotton, including those which were produced in India were being imported in large quantities. This has impacted the Indian farmer adversely. Cotton is domestically available in excess of demand. Therefore, the garment industry can source the domestically produced cotton including high quality and extra-long-staple cotton," the minister said.

Chaudhary also said that reduced import dependence would help the domestic garment industry.

The minister acknowledged that trade associations have made representations that difficulties were being faced by the textile and apparel industry due to the import duty.

Chaudhary argued that garment exporters have various duty-free import schemes and would not be affected by the duty on cotton.

The cotton Association of India has sought withdrawal of the 10% duty levied on imports saying the commodity has become costly and it was not in the interest of the domestic textile industry, the minister said. “The decision to impose a duty on imports of cotton has been taken to benefit domestic cotton farmers which in turn would help in higher domestic value addition and reduce import dependence," the minister said.

Source: https://www.livemint.com/industry/manufacturing/textile-industry-should-use-local-cotton-government-11628514881767.html

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