Finance Ministry Rejects the Demand to Remove 10% Import Duty on Cotton

The Indian Finance Ministry has rejected the demand to remove the 10 percent import duty on cotton saying the move was aimed at benefitting domestic cotton producers, which in turn reduce import dependence.  

Finance minister, Nirmala Sitharaman told the parliament in a written statement while responding to a question on additional import duty imposed on cotton that the import duty consists of 5% basic customs duty and 5% Agriculture Infrastructure and development cess on imports of raw cotton in union budget 2021-22. The sole aim was to benefit the domestic cotton farmers. 

Imports of cotton had significantly gone up in the last few years, even though India is the largest producer of cotton in the world. All varieties of cotton, including those which were produced in India were being imported in large quantities. All these activities impacted the farmer adversely. 

The Cotton Textiles Export promotion council has appealed to the Union Textile Minister Piyush Goyal to remove the customs Duty on cotton as it is mainly the extra long staple branded cotton and contamination free cotton that are imported. 

The government refused to accept their demands, saying enough incentives are in place for the garments industry under various schemes.