Piyush Goyal, Minister of Commerce and Industry and Textiles, has assured textile manufacturers that the government will actively consider the spinning sector's request for import duty exemption on cotton contracts for which bills of lading are issued until September 30, 2022.
According to a media release issued by the Textiles Ministry on Wednesday, during a meeting with industry stakeholders on Tuesday to discuss ways to manage the country's skyrocketing cotton and yarn prices, the Minister "appealed" to cotton and yarn producers to divert only surplus stock for exports after ensuring the hassle-free supply of the inputs to the domestic industry.
According to the statement, he warned that export should not come at the expense of domestic industry, which is the country's largest employer.
The Minister also announced the formation of the Cotton Council of India, an informal body led by industry veteran Suresh Bhai Kotak. According to the release, the council will work on a robust action plan to bring about a tangible improvement in the field, with representation from the Ministries of Textiles, Agriculture, Commerce & Industry, and Finance, as well as the Cotton Corporation of India and the Cotton Research Institute. The proposed council's first meeting is scheduled for May 28.
The Minister stated that the administration should not be pushed to intervene due to the potential long-term impact on the cotton value chain, implying that the government may not support a ban on the export of cotton yarn or any other related measure.
"In his address to the meeting, the Minister gave a clear and loud message to all stakeholders to resolve the cotton and yarn price issue in the spirit of collaboration rather than competition and super profiteering, without requiring government intervention," according to the release.
Responding to industry concerns about the end date for an import duty exemption, Goyal stated that the Centre was considering allowing exemptions not only on consignments arriving in India by September 30, 2022 but also on those loaded in the country of origin by that date.
Last week, Textile Ministry was discussing with the Finance Ministry the possibility of extending duty exemption on consignments for which the bill of lading is issued by September 30, 2022, because there was a time lag between the shipping of consignments by exporters and their arrival in the country, especially given the container shortage and port congestion.
