FinMin extends duty exemption on raw cotton imports till October 31
The finance ministry has extended the exemption of customs duty on raw cotton imports by a month till October 31.
On April 14, the ministry had given exemption from the duty and Agriculture Infrastructure Development Cess (AIDC) till September 30, 2022, for import of cotton to lower prices in the domestic market. In a notification dated July 4, the ministry extended this till October 31, 2022.
Amid rise in cotton and yarn prices, the textiles ministry had been pitching for an extension of the duty waiver beyond September. Industry too had been demanding extension of the duty-free import of cotton. Before April 14, raw cotton imports attracted 5 per cent Basic Customs Duty (BCD) and an equal percentage of AIDC.
The exemption from duty would benefit the textile chain — yarn, fabric, garments and made-ups — and provide relief to consumers.
Cotton prices have increased from Rs 44,500 per candy in February, 2021, to Rs 90,000 per candy in March 2022. Each candy weights 356 kilogram. The steep increase in cotton price and its impact on the prices of yarns and fabrics is severely impacting the potential growth of the cotton textile value chain, industry players said.