Duty waiver on cotton imports: Piyush Goyal asks authorities to expedite process
PremiumDuty waiver on cotton imports: Union Minister Piyush Goyal has asked concerned authorities to finalise the matter early.
Union Minister Piyush Goyal has instructed the competent authorities to "finalise the matter early" in respect to the renewal of the import duty waiver on cotton until December 31, amidst an extraordinary surge in cotton and yarn prices this season. In April, the government exempted all customs duties on cotton imports until September 30 in order to cut the price of cotton in the public interest. To fulfil the current demand, the minister suggested making imports easier from places where supplies are plentiful and overcoming procedural issues.
On Saturday, Piyush Goyal - the minister for Textiles and Commerce and Industry - met with the newly formed Textile Advisory Group in Mumbai to discuss concerns such as increasing cotton supplies and improving productivity.
"While addressing the approaches for augmentation in short-term by import, Textiles Secretary Upendra Prasad Singh advised industry to approach the Ministry of Agriculture & Farmers' Welfare for procedural requirements to enable import from some destinations," an official statement said.
"As regards extension of the period of waiver of import duty up to December 31, 2022, Goyal directed the concerned authorities to finalise the matter early," it added.
Suresh Kotak, Chairman of the Textile Advisory Group, emphasised the importance of ensuring seed availability for sowing, particularly new early maturing types, as well as the necessity to restructure the seed system in order to boost Indian cotton productivity from its current stagnation.
"Position on availability of cotton now was brought out and a request was made to help logistics to ensure shipping in time from three sources internationally," the Textile Ministry statement said.
Kotak shared that as per estimates of Committee on Cotton Production and Consumption, carry over/closing stock is 41.27 lakh bales, which is about 12.66 per cent stock to use ratio and equivalent to stock for 45 days consumption.
Cotton prices have risen from ₹44,500 per candy in February 2021, when an 11 percent import duty was imposed on cotton, to ₹90,000 per candy in March 2022, putting the largely cotton-based textile industry in a long-term slump.
The steep increase in cotton price and its impact on the prices of yarns and fabrics is severely impacting the potential growth of the cotton textile value chain.
The Central Board of Indirect Taxes and Customs (CBIC) had notified the exemption from Customs duty and Agriculture Infrastructure development Cess for import of cotton.
The notification came into effect from April 14, 2022 and will remain in force up to September 30, 2022.
Industry has been demanding removal of 5 per cent Basic Customs Duty (BCD) and 5 per cent Agriculture Infrastructure and Development Cess (AIDC) on raw cotton.
Addressing the meeting, Goyal exhorted that containment of factors impinging on productivity need to be tackled in a time-bound manner and the industry should participate in self-regulatory mode.
"The Ginning segment should take responsibility and make pheromone trap technology mandatory to monitor and prevent spread of Pink Bollworm pest attack from Ginneries and oil extraction units to cotton crop in farmers' fields," the minister said.
He suggested that everyone be sensitised for compulsory use of pheromone trap technology through the wide network of the Cotton Corporation of India Ltd, combined with efforts of the state governments.
Goyal also emphasized the need for protecting cotton crop from pink bollworm attack with contributions from Cotton Corporation of India Ltd, Cotton Association of India, Confederation of Indian Textile Industry and the Cotton Textiles Export Promotion Council.
Goyal directed that a portal be created with inputs from the Cotton Association, Ginners, Confederation of Indian Textile Industry, and the Southern India Mills' Association to address the need for accurate statistics across the value chain to enable policy decisions, trade facilitation, and traceability, among other things.
Self-compliance will be the mode of operation for the portal. If persuasion and self-compliance fail to produce results, 'disincentives' can be built into systems like Cotton Corporation of India Ltd, such as a prohibition on doing business with defaulters and a requirement that any government benefits be linked to the submission of details, according to the minister.
(With PTI inputs)