Import duty hurts. Textile industry capacity utilisation halves on high cotton prices

The capacity utilisation of the textile industry has plunged 50 per cent with domestic cotton prices ruling much above the international market due to levy of import duty.

Though raw cotton prices are hovering about ₹60,000 per candy (of 356 a kg) from its peak price of ₹1.10 lakh per candy, the rates are still higher than pre-Covid levels.

Cotton in India is selling at a premium compared to competing countries due to the import duty of 11 per cent levied by the government last February.

‘Retrograde measure’

Speaking at the 100th Annual General Meeting of Cotton Association of India, Atul S Ganatra, President, said the import duty on cotton has eroded the competitiveness of value-added products in the international markets and the textile industry is now constrained to work with only 50 per cent of its installed capacity.

Levy of import duty is a retrograde measure not in consonance with free trade policy of the country and sends a wrong signal to the world cotton community, he said urging the government to remove it.

Cotton productivity in India continues to be among the lowest in the world, despite an envious growth of Indian cotton sector over the years that has carved a niche for itself in the world cotton economy.

India’s cotton productivity per hectare is just 468 kg against the world average of 744 kg. India lags behind smaller countries such as Bangladesh, Syria, Sudan in cotton productivity.

All stakeholders including Cotton Association of India have made repeated representations to the Government to revive Technology Mission on Cotton, he said.

GM cotton yield doubled

Introduction of Genetically Modified cotton technology in India had provided the much-needed thrust to increase cotton productivity from 307 kg per hectare in 2001-02 to 566 kg per hectare in 2013-14. The yield has almost doubled in five years after the introduction GM technology in India, he said.

Popularising High Density Planting, farm mechanisation and giving a thrust to research-oriented agronomy are some other important ways forward to increase our cotton productivity, he suggested.

Extra-long staple (ELS) cotton production is much lower than the demand in the country. India requires about 20 lakh bales of ELS cotton to cater the domestic industry. However, the domestic production is about 5 lakh bales and imports the rest from Egypt, US and Australia.

“We have recommended to the Government to identify regions suitable for cultivation of ELS cotton, provide good quality cottonseed and policy support with additional MSP,” he said.

Source: businessline.