Cotton import duty has made Indian textile sector uncompetitive

A delegation from The Southern India Mills’ Association (SIMA) met the Indian Finance Minister Nirmala and requested her to exempt cotton from 11 percent import duty.

SIMA Chairman SK Sundararaman said the import duty on cotton has made Indian cotton 10-15 percent costlier, reducing global competitiveness.

He also said that the exporters have to miss out on the Remission of Duties or Taxes on Export Products (RoDTEP) export benefit while importing cotton under the Advance Authorisation Scheme.

Sundararaman added that India has become a cotton deficit country from a cotton surplus country and the country would need around 400 lakh cotton bales (of 170 kgs each) when the market revives.



He highlighted the uncertain position of spinning mills in South India, especially in the state of Tamil Nadu, which accounts for 45 percent of Indian spinning capacity.

“The mills face increasing costs, from procuring cotton from other states to selling yarn in other states. Power tariff hikes further strain their budget, constituting over 40 per cent of the total manufacturing cost,” he informed the finance minister.



Sundararaman appealed to the Finance Minister to exempt cotton from 11 percent import duty from April to October, which is an off-season as was done during the cotton season 2021-22.

“This would enable a win-win strategy for both, cotton farmers and the textile industry, thereby avoiding speculation of cotton prices by the trade,” he stated.