New Delhi: Major textile and garment makers expect Finance Minister Nirmala Sitharaman to scrap existing 10% tariff on cotton imports in 2022-23 Union Budget which is expected to be presented on February 1.
In an email interaction with ETRetail, SL Pokharna, CEO of Lifestyle Business, Raymond said that the garment and fabric export industry suffered badly last year due to an abnormal increase of 107 % of cotton lint prices. “This crisis has been accentuated because the government last year levied a 10% customs duty on the import of cotton fiber. In order to facilitate supply, this duty should be removed.”
Calling for cotton yarn to be imported duty free, he also said that cotton yarn prices have risen 78% this year compared to last year and this is having a significant impact on the non-food sector. organized.
Sharing the hosiery industry’s expectations of the upcoming budget, Vinod Kumar Gupta, MD, Dollar Industries, said the industry is under pressure due to rising cotton yarn prices.
“It’s because of international sentiment that has pushed domestic prices to a new high. We have already pleaded before the Minister of Textiles for the removal of import duties on raw cotton. This will make imports cheaper than domestic prices. Ultimately, the domestic prices also have to come down,” he said.
Apart from removing import duties on cotton, Pokharna said the Remission of Duties and Taxes on Export Commodities (RODTEP) scheme should be extended to reputable exports to encourage value-added exports in which the export of fabrics is converted into the export of garments.
The RODTEP program was introduced in last year’s budget to create a level playing field for exporters through integrated central and state tax rebates.
In the 2021 budget, the Minister of Finance also announced the Production Linked Incentive Program (PLI) for the synthetic and technical textile segments. The textile industry expects the PLI program to also be introduced for cotton textiles in this year’s budget.
For the promotion of textile MSMEs, Pokharna suggested that the government should devise a mechanism that protects the textile sector from abnormal increase in yarn prices and provides low interest loans to MSMEs to meet their fund needs. rolling.