Abolishing Import Duty on Cotton and Duty Drawback Rates on Cotton Exports
With the finance ministry announced abolishing the import duty on cotton and drawbacks on cotton exports, the textile industry heaved a sigh of relief as it can source cotton from wherever it is available at affordable prices.
Welcoming the decision, the Confederation of Indian Textile Industry (CITI) chairman PD Patodia said that about 4,500 textile mills throughout the country observed a one-day closure on Wednesday to attract the attention of the government to the serious problems that the industry is facing because of unreasonably high cotton prices.
“Because of speculation in the market by international traders, not only cotton prices sky rocketed, but cotton disappeared from the market, creating an artificial shortage in spite of an all time high record in cotton production in the country”, he said.
International traders have been cornering cotton stocks on the strength of finances available to them at LIBOR rates. Because of this cotton prices in the domestic market shot up over 35 per cent as compared to last years in the same period.
Patodia said the two decisions announced by the government on Wednesday have addressed the cotton issue substantially. However, proper monitoring of cotton exports and calibration of the quantity of cotton export on the basis of domestic demand are issues that still need to be addressed. CITI is also demanding that exportable surplus of cotton should be assessed on a regular basis and export quantities should be released periodically, based on such assessment.
Source : http://www.financialexpress.com/news/textile-sector-cheers-duty-drawback-relief/333602/