Chief Minister M.K. Stalin urged Union Textiles Minister Piyush Goyal on Monday to direct the Ministries concerned to remove the 11% import duty on cotton. He pitched for reducing the minimum lot at e-auction.
In a letter, he also sought the extension of 5% interest subvention to spinning mills for cotton procurement during the peak season (December-March). Mr. Stalin said he had received a representation from the apparel manufacturers on cotton and yarn price volatility and its impact on the prices of fabrics and garments. Tamil Nadu accounted for one-third of India’s textile business.
“The crisis has led to mass cancellation of export orders and hardships in the fulfilment of long-term export commitments. If this situation is not reined in, a large number of apparel and home textile units may soon become unviable, resulting in closure and large-scale unemployment and industrial unrest,” he said.
One of the major reasons for the cotton price volatility was the 5% basic customs duty, 5% agriculture infrastructure development cess and 10% social welfare cess imposed in the Union Budget for 2021-22. This amounted to an overall import duty of 11%, he said.
Mr. Stalin said another reason for the cotton price increase was the bulk discount offered by the Cotton Corporation of India to traders who procured almost 70% of minimum support price cotton auctioned at a lower rate during the cotton season. Then the traders speculated on the market. He requested Mr. Goyal to remove the 11% import duty; cut the minimum lot at e-auction to 500 bales; and give priority to yarn manufacturers in cotton procurement over traders.
