The minister asked the stakeholders to resolve the price rise issue with collaboration without pushing the government to intervene which, Goyal warned, would have a long-term impact on cotton value chain, the textile ministry said on Wednesday.
The minister's comments came after textile mills in Tamil Nadu, a leading exporter of garments, went on a two-day strike earlier this week demanding a ban on exports.
US cotton futures prices jumped to an 11-year high earlier this month, and Indian cotton and yarn prices soon followed.
India is the world's largest producer of cotton, with Bangaldesh, Vietnam and China its biggest buyers.
‘Resolve cotton and yarn price issue’
During a meeting, Goyal "gave a clear and loud message to all stakeholders to resolve cotton and yarn price issue, in the spirit of collaboration rather than competition and super profiteering, without pushing government to intervene as it may have long term impact on cotton value chain".
In the meeting, a cross-section of views and suggestions were deliberated for softening cotton and yarn prices on an urgent basis, to address the unprecedented price rise witnessed in the current season, the Textile Ministry stated.
It was pointed out that cotton productivity is the biggest challenge in the country, resulting thereby less cotton production despite the largest area under cotton cultivation, it added.
Addressing the meeting, Goyal said the government will "actively consider" the demand of the spinning sector for exemption from import duty on those import contracts in which bills of lading is issued up to 30 September this year.
The minister called upon the spinning and trading community to ensure hassle-free supply of cotton and yarn first to the domestic industry and appealed to divert only surplus cotton and yarn for exports.
He cautioned that export should not be at the cost of domestic industry, which is the largest generator of employment in India.
The minister emphasised the need for making available better quality of seeds to improve productivity of cotton farmers.
He stressed the need for handholding of cotton farmers besides extending all possible support to stakeholders engaged in backward and forward integration.
Goyal also announced the formation of Cotton Council of India under the Chairmanship of Suresh Bhai Kotak.
The Council will have representation from Ministry of Textiles, Agriculture, Commerce, Finance, Commerce and Industry, Cotton Corporation of India and Cotton Research Institute.
The first meeting of the proposed Council will be held on May 28 to discuss, deliberate and prepare a robust action plan for bringing out a tangible improvement in the cotton segment.
Pointing out that the government is committed to protecting the interests of cotton farmers, spinners and weavers, the minister assured to actively consider the demand of the spinning sector for exemption from import duty on those import contracts in which bills of lading are issued up to 30 September 2022 to overcome the current cotton shortage and logistic issues.
The predominantly cotton-based textile industry is facing a long-drawn recession on the cotton front as the cotton price increased from ₹44,500 per candy in February last year, when an 11% import duty was levied on cotton, to ₹90,000 per candy in March this year.
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.
With agency inputs
