SIMA seeks import duty exemption on cotton till Oct 2023

Coimbatore, Apr 19 (KNN) The Southern India Mills’ Association (SIMA) has urged the union government to remove 11 per cent import duty on cotton till October 2023.

Ravi Sam, Chairman of SIMA said that imposition of the duty in the 2021-22 budget led to steep rise in cotton prices and that eroded the competitiveness of the Indian textile industry, the main consumer of cotton.

“Most of the cotton arrived in the market between November and March every year. Since majority of the spinning mills were MSMEs, they could buy and stock cotton only for three months due to working capital constraint, and to bridge the supply-demand mismatch during the off-season (April to October) the mills opt for imports. But, it had become unviable due to 11 per cent import duty,” he said.

Centre has earlier exempted cotton from 11 per cent import duty during April 2022 to October 2022.

SIMA in an official statement said that though the area under cotton increased from 124 lakh ha to 130 lakh ha, cotton crop for the current season was likely to be only around 320 lakh bales.

As per reports, cotton price this year have dropped over 25 per cent compared to last year and over 40 per cent of the cotton was yet to arrive in the market.

Sam pointed out that the farmers and traders were holding the same anticipating increase in the price. Hence, the industry was facing shortage of cotton.

The association chairman added that the industry’s annual requirement of cotton was 320 lakh to 330 lakh bales and about 40 lakh bales were usually exported. “The industry must import cotton to meet its needs and hence, the government should remove the import duty during the off season,” he said.  (KNN Bureau)