The South India Spinners Association (SISPA), while welcoming the government’s decision to temporarily exempt the 11% import duty on cotton has emphasised, that recurring temporary exemptions do not provide a long-term solution to the challenges faced by the cotton and textile value chain.
SISPA has urged the government to introduce a permanent and predictable policy on the 11% cotton import duty and establish a transparent, formula-based mechanism that would automatically suspend the duty whenever the gap between domestic and international cotton prices exceeds a specified threshold.
According to SISPA, small and medium spinning mills continue to be severely affected by fluctuations in cotton prices. Variations in domestic cotton production, quality, availability, and international price movements have significantly increased raw material costs, affecting their competitiveness and sustainability.
“They also stated that the periodic imposition and withdrawal of cotton import duty over the years have created uncertainty in the cotton market and contributed to price volatility. Such fluctuations often benefit intermediaries and stockholders, while the burden falls on spinning mills and textile manufacturers,” the Hindu reported.
SISPA pointed out that small spinning mills generally procure cotton only to meet immediate production requirements and do not have the financial capacity to maintain large inventories. Moreover, a significant portion of the yarn produced by these mills is sold in the domestic market rather than exported.
SISPA firmly believes that the interests of cotton farmers and the textile industry are not mutually exclusive. The association said a predictable policy framework should safeguard the interests of farmers, spinning mills, textile manufacturers, and the millions of workers dependent on the industry.
Image courtesy: Cotton Brazil
