Home / Knowledge / News / Textiles / NCC - India's subsidies major impediment to cotton trade
NCC - India's subsidies major impediment to cotton trade
23
Apr '09
The National Cotton Council says India's cotton subsidies coupled with its failure to notify the World Trade Organization (WTO) of those subsidy levels is a major impediment to cotton trade.

WTO member India's raw cotton and textile product subsidies and its lack of transparency were the focus of testimony presented April 21 to the U.S. International Trade Commission (ITC) by Dr. Gary Adams, the NCC's vice president of Economics & Policy analysis. The ITC public hearing in Washington, DC, was held to investigate the effects of India's tariff and nontariff measures on U.S. agricultural exports.

Adams said the NCC is “very concerned with the ongoing and expanded subsidies for cotton that Indian farmers are receiving in violation of their WTO commitments. We are also concerned that India's stance in the Doha Round negotiations would result in no increased market access for cotton fiber into India. Further, its textile policies unfairly enhance its textile competitiveness, while contributing to a low level of U.S. imports into India.”

He said India's government has contributed subsidies and other measures that have helped drive up India's cotton production – doubled over the past decade – so that it has surpassed the United States and is now the world's second largest producer.

He noted that India recently announced increases in its Minimum Support Prices for cotton -- up to 48 percent in some instances. Based on current exchange rates, the minimum support price equates to approximately $0.72 per pound for the most commonly-produced qualities of cotton, as compared to international prices ranging between $0.55 and $0.58 per pound. This discrepancy between Indian prices and world prices has led the Indian government to authorize the purchase of up to 11.7 million bales from India's 2008 cotton crop.

In addition, Adams said, another subsidy scheme is in place whereby cotton is being sold from government stocks to Indian mills at discounted prices – of between $23 and $29 per ton.

“While the discount scheme is available to local mills and local traders, market sources expect that the local trade may also be using the bulk discount scheme for exports,” he said.

Regarding India's raw cotton exports, Adams testified that the country announced a new export subsidy scheme for cotton exports equal to 5 percent of the value – a move that will support India's internal prices while artificially increasing its competitiveness in world markets. It was already the case that Indian cotton was often offered at a 3-5 cent discount to similar growths from other countries, he said, so the addition of an export subsidy allows India to increase this discount relative to their competitors.

“While India has been among those who have joined the chorus against U.S. cotton programs, “ Adams said, “it has chosen to increase its own internal subsidy levels and expand export subsidies to cotton, even though it apparently has never filed any export subsidy schedules as part of the Uruguay Round commitments within the World Trade organization (WTO) and has no authority to apply cotton export subsidies without being in violation of its commitments.”

Must ReadView All

Textiles | On 19th Jan 2017

Union Budget: Textile sector expects excise duty revisions

Excise duty on man-made fibres should be reduced to bring it on par...

Union textiles minister Smriti Irani at the inauguration of IIGF in New Delhi with textiles secretary Rashmi Verma and other dignitaries. Courtesy: PIB

Apparel/Garments | On 19th Jan 2017

Ministry to reimburse apparel exporters for state levies

The textile ministry has received a sum of Rs 500 crore from the...

Apparel/Garments | On 19th Jan 2017

Asahi Kasei to display sustainable fibre at trade shows

Asahi Kasei, specialty Japanese fibre producer, will be displaying...

Interviews View All

Cyril Pereira
Reed Exhibitions India, organiser of Asian Machine Tool Exhibition 2016

'Major problem in the textile machinery manufacturing industry is the lack ...

Awen Delaval
Samatoa

'Natural fibres are appreciated for traditional authenticity'

Dinaz Madhukar
DLF Emporio and DLF Promenade

‘Each event and promotion is planned out keeping in mind the business of...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Suresh Patel
Sidwin Fabric

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

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

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
January 2017

January 2017

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

SUBSCRIBE


Browse Our Archives

GO


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