Cotton imports used to be subject to 5% tariffs and 5% agricultural infrastructure development tax
Cotton imports used to be subject to 5% tariffs and 5% agricultural infrastructure development tax
The government’s decision to impose tariffs on cotton imports will help boost exports of value-added textile products, A. Sakthivel, president of the Federation of Indian Export Organizations (FIEO) said on Thursday.
The move, he said, would significantly boost exports from the apparel and makeup sectors by also softening yarn and fabric prices.
The Treasury Department on Wednesday waived tariffs on cotton imports until September 30, a move expected to benefit the textile industry and lower prices for consumers.
Before the announcement of the exemption, cotton imports were subject to a 5% Basic Custom Duty (BCD) and 5% Agriculture Infrastructure Development Cess (AIDC). The industry had demanded a duty exemption to lower domestic prices.
The Central Board of Indirect Taxes and Customs (CBIC) has notified the duty exemption and AIDC for cotton imports.
“Cotton textile exports will receive another boost as high cotton prices have weakened the competitive advantage,” Mr Sakthivel said.
He added that India has recently increased its market share in apparel exports to the US and many other countries and the signing of the Free Trade Agreement with the UAE and Australia would further accelerate this trend.
“The government has given extensive support to the textile sector and we should strive to reach US$100 billion worth of textile exports by 2030,” he said.
