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The Cotton Textile Export Promotion Council of India has urged the Government to allow duty-free import of Extra Long Staple type to create a level playing field with the competing countries.
The Government has removed import duty on cotton till October 31, but exempted the specialised cotton variety ELS which is not grown commercially in India.
Increase exports
Manoj Patodia, Chairman, Texprocil said, the move will help fabric and home textile exporters to fulfil orders of global brands and retailers at competitive prices and increase exports as other competing countries such as Bangladesh, China and Vietnam allow duty-free cotton imports.
Moreover, he said unless the cotton price volatility is not regulated, exporters will not be in a position to manufacture products for global market.
Annual world export
The annual world export of certain category of products that are textile Made ups (Home Textiles) by definition, but fall under Chapter 94 which provides Remissions of Duties and Taxes on Exported Products (RoDTEP) of 0.5 per cent. The remission rates for these products under HS 9404 should be in line with that of home textiles which is 8.2 per cent.
The annual world export of knit fabrics is about $42 billion of which India’s share is just 1.8 per cent at $763 million. The remission rate of 1 per cent fixed for cotton knitted fabrics does not fully reimburse domestic taxes. The rates for knit fabrics should be 4.3 per cent which will be in line with the rate for woven fabrics.
In the next 5-7 years, India’s textile industry can expand to $250 billion and achieve an export target of $100 billion, he said.
Free trade agreements
The conclusion of free trade agreements with Canada, EU, UK, Israel and GCC countries will give a further impetus and boost to trade and help the industry in achieving the target $100 billion in the next 5-7 years.
Importing textile nations lay strong emphasis on traceability of finished goods or intermediate products right till the fibre stage. Texprocil has tied up with Control Union for the GCC (General Certificate of Conformity) program which will be useful for companies across the value chain.
The Union Budget has allowed duty free import of specified goods by bonafide exporters of items such as handicraft, textile and leather garments but made ups (Home Textiles) has been excluded from the purview of this facility.
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