Home / Knowledge / News / Textiles / CITI highlights perils of incentivizing cotton exports
CITI highlights perils of incentivizing cotton exports
Nov '11
Confederation of Indian Textile Industry (CITI) has pointed out that there are efforts being made by vested interests for obtaining export incentives for raw cotton.

Shri S.V. Arumugam, Chairman, CITI in a letter addressed to the Prime Minister, Commerce, Industry and Textiles Minister and Agriculture & Cooperation Minister has stated that while export of cotton is necessary and correctly being allowed without any restrictions, granting any incentives on export of cotton would make Indian cotton available to the other competing countries in the textile space at lower prices.

Shri S.V. Arumugam pointed out that in the year 2008-09, when the government had provided export incentives for raw cotton, this led to an expenditure of around Rs.1,000/- crore by way of incentives to cotton exporters. Such incentivized exports of raw cotton to competing countries ruined the domestic textile industry and government had to spend another Rs.2,000/- crore for introducing a relief package for the affected textile industry.

He has cautioned that re-introduction of export incentives for raw cotton would again lead to a similar expenditure for the government for the benefit of a few cotton exporters, though the arguments will always be adduced in the name of farmers.

Shri S.V. Arumugam pointed out that it is essential to allow export of surplus cotton. But it is of utmost importance to ensure that we do not put our cotton cheaper in the hands of our competing countries like China, Bangladesh and Pakistan, by providing incentives on cotton exports .If we do so, we would be destroying the viability of the Rs.1 lac crore textile investments made in our country, its huge employment potential and would in reality be subsidizing creation of jobs in our competing countries, while destroying employment opportunities in India.

Shri S.V. Arumugam also pointed out that current cotton prices are substantially above the minimum support prices announced by the government and there is no possibility of any drastic decline in cotton prices on the basis of the current market situation.

He requested government not to provide any form of subsidies to cotton exports as it is uncalled for, it destroys employment creation in the Rs.1 lac crore textile industry, it causes huge out flow from the exchequer and is ABSOLUTELY not necessary to protect farmers who are already adequately protected by high support prices which make cotton the most preferred crop.

Cotton is not perishable and lends itself beautifully to successful support price operations, he added. Shri Arumugam pointed out that we have evidence of the level of injury that providing subsidy for cotton exports can cause to our country, from the previous experience in 2008-09.

Confederation of Indian Textile Industry (CITI)

Must ReadView All

President Donald Trump; Courtesy: White House

Textiles | On 23rd Jan 2017

US textile industry eager to work with President Trump

The US textile industry is eager to work with President Donald Trump...

Textiles | On 23rd Jan 2017

LyondellBasel expands Texas plant ethylene capacity

US based producer of petrochemicals and speciality chemicals...

Textiles | On 23rd Jan 2017

China’s cotton imports down 39% in 2016

China’s total cotton imports declined by 39.1 per cent to ...tons in...

Interviews View All

Shawn Honeycutt
Bolger & O'Hearn

‘The Indian market is interesting and rather persistent in seeking new...

Sonia Agarwal

‘The terms eco-friendly and organic are common but everyone perceives them ...

Smita Murarka

‘There is huge demand in the Indian lingerie market for non-wired styles.’

Marcel Alberts

Coating at a fibre level is a practice not usually seen in the...

Kevin Nelson

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Rupa Sood and Sharan Apparao

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

January 2017

January 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


Subscribe today and get the latest News update in your mail box.
Advanced Search