The textile and clothing sector here has expressed disappointment over the levy of customs duty on cotton imports in the Union Budget.
Manoj Patodia, chairman of the Cotton Textiles Export Promotion Council, said that the plan to establish seven mega investment textile parks in three years was a positive step towards making the industry globally competitive. It would attract investments and boost employment. However, the plan to levy customs duty on cotton imports would make import of branded cotton expensive.
T. Rajkumar, chairman of Confederation of Indian Textile Industry, pointed out that levy of customs duty on cotton and cotton waste, that so far came under nil duty, comprises 5% basic customs duty and another 5% Agriculture Infrastructure and Development Cess (AIDC) on cotton and 10 % basic customs duty on cotton waste. The new import duty comes into effect from February 2, 2021.
He appealed to the Prime Minister to withdraw the levy to sustain the global competitiveness of Indian textiles and apparel industry. Otherwise, there will be a fall in the exports of cotton textile and clothing products, he said.
Southern India Mills Association chairman Ashwin Chandran said that the imports were cotton varieties that are not produced in India and cater to some of the niche segments in the domestic and international markets. The levy of customs duty on cotton has come as a “rude shock” to the industry. When the government introduced customs duty on cotton in 2008 the entire textile value chain went on a nationwide bandh.
Apparel Export Promotion Council chairman A. Sakthivel said the mega textile parks would help create world class infrastructure for the industry and increase exports.
Tiruppur Exporters Association president Raja Shanmugham said allocation of ₹ 100 crore for skill development and higher allocation for technology upgrade were much needed measures for the industry.
The Indian Texpreneurs Federation said reduction of basic customs duty on nylon would help the MMF sector.