Industry takes cotton grievances to Textile Minister

14 Oct '09

4 min read

The industry has requested Textile Minister, Thiru Dayanidhi Maran to intervene in some of the serious issues affecting the entire cotton economy of the country.

In a meeting chaired by Textile Minister, Office-Bearers of Confederation of Indian Textile Industry (CITI), Southern India Mills' Association (SIMA), Northern Indian Textile Mills Association (NITMA) Cotton Textiles Export Promotion Councils (Texprocil) and other industry representatives pointed out that the export incentive for raw cotton and the procedures adopted for disposal of procured cotton during cotton year 2008-09 played a major role in increasing cotton prices in the domestic market and making Indian cotton available to the competing countries at cheaper prices.

In his presentation to the Minister, Shri Shishir Jaipuria, Chairman, CITI requested that export incentives for raw cotton should not be reintroduced since the country will have very limited exportable surpluses in cotton year 2009-10.He pointed out that there has been damage to cotton because of the recent floods which would bring down production, whereas industry is picking up and cotton consumption would go up. Since shortage of cotton is expected in the global markets, international prices are likely to go up and this will drive export growth from India in raw cotton.

On top of all this, if incentives are also given on raw cotton export, domestic textile and clothing industry which employs millions of workers would become totally uncompetitive and this would affect industrial production, export earnings and employment generation. He also pointed out that if all cotton produced in the country is processed into textile products, this would encourage value added exports and create more jobs.

The industry representatives strongly pleaded that discount on bulk purchases that Cotton Corporation of India had operated during last cotton year should not be operated this year, since this would only help large traders to manipulate the market.

The meeting was attended by senior officials from the Ministry,in addition to the Minister himself. The Minister assured the industry that the discount scheme on bulk purchases would be discontinued. On export incentives for raw cotton, Textile Minister informed the industry that he had already taken up this issue with the Prime Minister, Finance Minister and Commerce Minister. The Minister also responded favourably to the industry's request and Cotton Corporation of India should open more depots in textile clusters for selling procured cotton. Cotton Corporation of India was instructed to ensure continuous supply of procured cotton to the industry and to avoid holding procured cotton which could lead to artificial shortage in the market.

The Textile Minister observed that CCI should have an industry friendly approach in MSP operations, while ensuring at the same time that it does not run into losses. The Minister also advised the industry to ensure prompt purchase of procured cotton so that CCI would not have to incur carrying charges and would be able to promptly dispose of procured cotton.

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