The government's decision to remove import duty on cotton is likely to help bring down prices of the commodity, Textiles Secretary U P Singh said on Thursday. The finance ministry on April 13 waived customs duty on cotton imports till September 30, a move that will benefit the textile industry and keep prices low for consumers.
Currently, cotton imports attract 5 per cent Basic Customs Duty (BCD) and 5 per cent Agriculture Infrastructure Development Cess (AIDC). The industry has been demanding a waiver of duty to lower domestic prices.
"It would enable people who want to import. We are expecting that within a day or two, you would certainly see the impact on prices going down but at the same time we would not expect the prices to be very low because there is a shortage all over (the world)," Singh told reporters here.
In India, cotton crops get affected because of unseasonal rains, and in the US, there were drought-like conditions.
"So supply is less, demand is high....import duty removal would certainly have an impact on prices in India," he added.
Since the arrival of cotton in October 2021, prices are increasing.
The textile industry has been seeking relief as cotton prices have soared to about Rs 90,000 per candy.
Singh said farmers are "happy because they are getting about two times more prices than that of MSP".
"This year, we expect at least 10-15 per cent increase in area under cotton because they (farmers) have got a very good rate," he added.
He also said that not only cotton, prices of all raw materials like steel, and cement are high.
"This is not a phenomenon which is confined to India, this is all over,' he said adding now "production is not increasing but consumption is increasing every year".
Every month, about 1.5 - 2 lakh spindles are being added to the spinning industry because demand is good, he said.
Source Name: Economics Times