Home / Knowledge / News / Textiles / Scrapping cotton import duty receives mixed reactions
Scrapping cotton import duty receives mixed reactions
15
Jul '08
Following the verdict of Union Government to scrap 14 percent duty on import of cotton, prices of the raw material in the domestic market are showing all the likelihood of a climb down. Evidently, the real motive behind this step taken was to ensure that the garment and textile industry which was until now reeling under the pressure of high prices, is benefited.

In an exclusive interview with Fibre2fashion, Mr Rahul Mehta, President of Clothing Manufacturers Association of India and Vice President of Asian Apparel Federation opined, “I think this is a very positive step taken in the right direction. Exports from India are primarily cotton-centric, and in the last few months, apart from inflation in general the sky-rocketing prices of cotton was killing the industry. This measure announced by the government will go a long way in calming down the prevailing havoc, and will certainly make our garments more competitive in the global market.”

Dr DK Selvaraju, Secretary General of Southern India Mills Association (SIMA), shared a slightly different view saying, “Definitely the steps taken by the Government are welcome. Though the industry has been pleading to take such steps right from the beginning of cotton season, ie., October, 2007 onwards, the Government responded a little late but, cotton prices may still come under control. However, these initiatives have indeed created a level playing field to a certain extent in the globalized environment.”

However, Dr Selvaraju still believed that the Government needs to take a number of additional measures to ease out the situation and enable the textile industry to come out of the cotton crisis. Some of these measures include, banning of cotton export immediately until December 31, 2008 by which time the new crop would arrive and the circumstances can be reviewed.

Again, channelizing all future cotton exports through Cotton Council International (CCI) and other State Federations and a levy of 5 percent duty on cotton exports will also go a long way in solving the existing crisis. Moreover, the Government must also ensure to have 40 percent stock to use ratio, since all the competing countries maintain the same at around 42 percent. A reduction in margin money for working capital to 10 percent against the prevailing 25 percent and a 7 percent charge on loans like for agriculture will also be of immense help.

Mr PG Makhija, Managing Director of Ambuja Group was skeptical about Government's decision and strongly believed that scrapping of import duty on cotton shall not help textile industry in real terms. He asserted that, “Export Oriented Units (EOUs) could import cotton without duty. Similarly other exporters can import cotton against advance licence without any duty. Even for EOUs and other exporters, the imported cotton was not viable without duty due to high prices. Therefore there shall be no real relief to the textile industry by scrapping the import duty. The Government decision shall only create a psychological impact on the minds of Indian cotton traders or international traders who are hoarding the raw material. But even this impact is short lived.”

Must ReadView All

Textiles | On 8th Dec 2016

Cabinet okays reforms to boost jobs in made-ups sector

The Union Cabinet chaired by prime minister Narendra Modi has given...

Textiles | On 8th Dec 2016

R&D is key to textile industry’s growth: Kavita Gupta

Research and development is the key to the growth of the textiles...

Textiles | On 8th Dec 2016

Taiwan’s Everest Textile to invest $18.5 mn in US

Everest Textiles USA, a unit of Taiwan based Everest Textile Company, ...

Interviews View All

Binoy Ravjani
Hero's Fashion

‘One of the recent trends in hand block printing is the indigo process,...

Karan Suratwala
Key Textile Accessories Private Limited

Chinese imports are destroying the supply chain

Manfred Mentges
Sedo Treepoint GmbH

We see a higher demand in colour management systems, as customers see big...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Marcel Alberts
Eurofibers

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

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Wendell Rodricks
Wendell Rodricks

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

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Silvia Venturini Fendi
Fendi s.r.l

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

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
December 2016

December 2016

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

SUBSCRIBE


Browse Our Archives

GO


Advanced Search