Textile and apparel sector seeks financial support to tide over challenges posed by U.S. tariff

The textile and apparel sector, which welcomed the move by the Central government to suspend import duty on cotton till December 31, has said the government should address the issues related to manmade fibre Quality Control Orders and should extend two years moratorium for repayment of principal amount to meet the challenges of the U.S. tariff.

S.K. Sundararaman, chairman of the Southern India Mills’ Association, and Ravi Sam, vice-chairman of the Cotton Textiles Export Promotion Council, told the media in Coimbatore on Thursday that the government should provide 30% collateral-free loan under ECLGS with 5% interest subvention as extended during Covid period, enhance export benefits relating to duty drawback, RoSCTL (Rebate of State and Central Taxes and Levies) / RoDTEP (Remission of Duties and Taxes on Exported Products), extend RoSCTL for five years and extend pre and post shipment credit to all textile product exports including yarn.

On the apprehensions that exemption of the import duty on cotton at the beginning of the cotton season might impact cotton farmers, they said that the 11% import duty was imposed when India exported 30–50 lakh bales (170 kg each) of cotton annually.

Currently, cotton production has fallen below 295 lakh bales against an industry requirement of about 318 lakh bales, as estimated by the Committee on Cotton Production and onsumption (CoCPC). It is essential to take the cotton available at an internationally competitive price for the industry to grow and fully consume the home-grown cotton and also enable the country to export the cotton when the production becomes surplus.

The Centre has allocated ₹5,900 crore for the “Mission for Cotton Productivity” and it is likely to take five-seven years for the country to become self-sufficient in meeting its cotton requirements. Hence, duty-free import and export of cotton will benefit both, cotton farmers and the industry. The farmer is protected by the Minimum Support Price that is increased regularly, they said.