Why is the Textile Mill Association Praising the Centre for Duty Exemption on Cotton?
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Synopsis
The Northern India Textile Mills Association (NITMA) commends the Central government's exemption of import duties on cotton until September 30, aiming to boost the textile industry and support India's export goals. This strategic move offers essential relief amidst rising raw material costs and highlights the need for similar support for the man-made fibre sector.
Key Takeaways
- Import duties on cotton waived until September 30.
- Five percent customs duty and additional cesses removed.
- Relief aimed at boosting textile industry amid high raw material costs.
- Concerns about limited duration and shipping times.
- Call for similar support for man-made fibres.
Chandigarh, Aug 20 (NationPress) The Northern India Textile Mills Association (NITMA) has expressed its appreciation for the Central government's significant move to waive import duties on all types of cotton (HSN 5201) until September 30. This exemption includes a five per cent customs duty, a five per cent Agriculture Infrastructure and Development Cess (AIDC), and an additional one per cent cess, providing essential relief to the textile sector.
NITMA's Senior Vice-President Munish Avasthi extended gratitude to Prime Minister Narendra Modi for his forward-thinking leadership, as well as to Union Finance Minister Nirmala Sitharaman and Textiles Minister Giriraj Singh for promptly addressing the urgent issues faced by the textile industry.
Avasthi pointed out that this initiative is vital for reaching India's ambitious $100 billion textile export target, particularly as the industry deals with soaring raw material prices and a growing disparity between domestic and international cotton rates.
He remarked, "The elimination of import duties on cotton represents a strategic move that will bolster the supply chain and enhance the entire cotton value chain amid significant raw material pressures," in a statement.
However, he raised a concern about the short time frame of the exemption, highlighting that cotton shipments from major sourcing nations like the US and Brazil typically take 70 - 75 days, which may limit the advantages for importers.
Discussing the man-made fibre (MMF) sector, Sidharth Khanna, NITMA's President, emphasized the persistent challenge of the Inverted Duty Structure (IDS) under GST, which continues to impede growth and investment throughout the MMF textile value chain.
While praising the government's responsive approach regarding cotton, he called on the Ministries of Finance and Textiles to provide similar assistance to MMF by implementing a uniform five per cent GST rate across the MMF value chain, aligning it with the cotton value chain by reducing GST on MMF yarn from 12 to five per cent and on inputs such as PTA, MEG, and man-made fibres from 18 to five per cent.
Point of View
I believe this decision by the Central government is a commendable step in addressing the pressing challenges faced by the textile industry. By exempting import duties on cotton, the government is showing its commitment to supporting a vital sector of our economy. However, the industry must also advocate for reforms in the man-made fibre space to ensure comprehensive growth and stability.
NationPress
20/08/2025
Frequently Asked Questions
What is the significance of the duty exemption on cotton?
The exemption is crucial for stabilizing the textile supply chain and alleviating financial stress on the industry, aiding in the pursuit of India's $100 billion textile export target.
How long will the exemption last?
The current exemption will remain in effect until September 30.
What concerns were raised about the exemption?
Concerns were noted regarding the limited duration of the exemption and the typical shipping times from key sourcing countries like the US and Brazil.
What is the Inverted Duty Structure (IDS) issue?
The IDS under GST continues to hinder growth and investment in the man-made fibre textile value chain.
What support is being requested for man-made fibres?
NITMA is urging the government to apply a uniform five percent GST rate across the MMF value chain, aligning it with cotton.
