Govt considering textile duty structure rejig in Union Budget: Report

The industry says a slowdown in exports of cotton yarn due to weakening global demand has tied their hands

cotton yarn, cotton, textile, clothes
BS Web Team New Delhi
2 min read Last Updated : Jan 09 2023 | 11:09 AM IST

The $200-billion Indian apparel and textile industry is likely to get relief via a rejig in duty structure in the next Union Budget, according to a report in Live Mint. The report cited a senior government official saying that the textile duty adjustments will help make Indian sellers competitive in the Western markets.

 

The textile industry has repeatedly sought relief from the government, saying they are battling high cotton prices. Indian cotton prices had touched a record high of Rs 1 lakh per candy at one point this FY, likely because of a mismatch in demand and supply. The industry also says a slowdown in exports of cotton yarn, a key raw material, due to weakening global demand has also tied their hands.

 

Until the new cotton season, the prices are expected to remain high.

 

"Our thinking is to avoid inverted [duty] structure in trade and to make sure that if it is necessary to import raw material, the price should not be excessive, which will make our final product uncompetitive," the official told Mint.

 

"Meanwhile, we are taking steps to boost the production of cotton by implementing newer techniques for efficient farming.

 

Branding activity of Indian varieties of cotton, such as 'Kasturi cotton' is also taken up in collaboration with the industry, which will have a long-term positive impact on the industry. Free trade agreements, especially with the EU, UK and Australia, will open up large markets for Indian textile products," the official added.

 

Atul S Ganatra, president of the Cotton Association of India, sought an exemption from import duty. "The government has imposed an 11% import duty on cotton from 2 February 2021. This has drastically eroded the competitiveness of our value-added products in the international markets, and our textile industry, which is the second largest employment provider in the country, is now constrained to work with only 50% of its installed capacity."

 

Chandrima Chatterjee, secretary general of the Confederation of Indian Textile Industry (CITI), echoed the sentiment. "We have been seeking removal of duty on cotton …largely on extra-long-staple cotton which India does not have…as cotton prices are under stress."

One subscription. Two world-class reads.

Already subscribed? Log in

Subscribe to read the full story →
Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

Topics :textile industryCotton textile exportsBS Web ReportsBudget 2023Union budgets

Next Story