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    HomeBusinessDuty-free cotton imports: Centre considering demand for flexibility in application of deadline

    Duty-free cotton imports: Centre considering demand for flexibility in application of deadline

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    Economy

    At stakeholder meeting to discuss rising prices, Goyal announces formation of Cotton Council of India 

    Commerce Minister Piyush Goyal  has assured textile manufacturers that the government  will actively consider the spinning sector’s demand for import duty exemption on cotton contracts for which bills of lading are issued up to September 30, 2022.

    In a meeting with industry stakeholders on Tuesday, the Minister also announced formation of the Cotton Council of India, under the chairmanship of industry veteran Suresh Bhai Kotak.. The meeting was called to discuss ways to cool cotton prices.

    The council, with representation from the  Ministries of Textiles, Agriculture, Commerce & Industry and Finance, as well as the Cotton Corporation of India and the Cotton Research Institute, will work on a robust action plan to bring about a tangible improvement in the field, a press release issued by the Commerce and Industry Ministry said.

    The first meeting of the proposed council has been scheduled on May 28. 

    Although the government had announced import duty exemption on cotton from mid-April till September 30, 2022, prices have not cooled; instead, they have almost doubled to over Rs 1,00,000 per candy over the last seven months.

    Garment manufacturers and exporters have been seeking a short-term export ban on cotton yarn, but the government seems to prefer self-regulation by the industry.

    The Minister made it clear that the issue of rising cotton and yarn prices must be resolved in the spirit of collaboration rather than competition and super profiteering, without pushing the government to intervene, as it may have a long-term impact on the cotton value chain, the statement said.

    “He appealed to the spinning and trading community to ensure hassle-free supply of cotton and yarn to the domestic industry and only surplus quantities should be diverted for exports. He cautioned that export should not be at the cost of domestic industry, which is the largest employment generator in the country,” the statement added

    Responding to industry concerns on the end date for import duty exemption, Goyal said the Centre was considering the industry’s demand to allow exemptions not only on consignments that reach India by September 30, 2022, but also on those that are loaded in the country of origin by that date . 

    BusinessLine had reported last week that the the Textile Ministry was discussing with the Finance Ministry the option of extending duty exemption on consignments for which the bill of lading is issued by September 30 2022, since there was a time-lag between the shipping of consignments by exporters and their arrival in the country, especially at a time when there is a container shortage and port congestion.

    Published on May 18, 2022

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