Indian industry group seeks duty-free cotton imports

India needs duty-free cotton imports, a leading Indian industry group told the government on Wednesday, as rising raw material prices have led to a decline in capacity utilization at cotton mills.

 

India is the world's largest cotton producer and the Cotton Association of India (CAI) wrote in a letter to the textile minister that the country's 11 per cent tariff on cotton imports has made it economically unviable to import cotton.
 

 

Indian cotton prices are nearly 15 per cent higher than those of other origins and the high prices erode the competitiveness of the textile industry, while causing capacity utilisation to fall to 50 per cent, the letter reads.

 

The association said, "The removal of tariffs will help the cotton industry to operate at optimum capacity."

 

Industry sources said that despite the increase in production, Indian traders were still struggling to export cotton, as cotton farmers who were expecting prices to rise in the coming months delayed sales.