The basic customs duty (BCD) and the agriculture infrastructure development cess (AIDC) imposed on the cotton has made business problematic for the Indian textile and apparel industry.
India has slowly climbed up the ladder to reach its standing position in the market but with these custom duty charges, they will lose their competitiveness and market share to rivals like Bangladesh, Sri Lanka, Pakistan and Vietnam.
Ashwin Chandran, chairman of Southern India Mills’ Association (SIMA) has appealed to the finance minister Nirmala Sitharaman to dissolve both these duty fees. 2021-22 budget contains the announcement of 5 per cent BCD and 5 per cent AIDC with applicable cess on the import of cotton which will play unfavorably for the value added sectors and will pose a threat to India’s thriving textile and apparel sector.
“The levy of these import duties is a major blow to the Indian cotton textiles industry, which was just recovering from the losses suffered during the pandemic and lockdowns last year,” Chandran wrote.
Indian Spinning Industry faced a similar ordeal in 2007-08 when an identical import duty of 10 per cent BCD, 4 per cent additional customs duty and 3 per cent education cess was levied.
However, after seeing the adverse effects, the government withdrew the duties.
