Federation of Indian Export Organisations (FIEO) President A. Sakthivel informed that the government’s decision to exempt customs duty on cotton imports into the country will help boost exports of value-added products of textiles in a major way. He said that the decision will considerably boost clothing and ready-to-wear exports by lowering yarn and fabric prices. The Finance Ministry said that customs duties on cotton imports will be abolished until September 30, benefiting the textile industry and lowering consumer prices. Cotton imports were subject to a 5% Basic Customs Duty (BCD) and a 5% Agriculture Infrastructure Development Cess before the exemption was announced (AIDC). The industry had been requesting a tariff exemption in order to reduce domestic prices.
The Central Board of Indirect Taxes and Customs (CBIC) notified the exemption from customs duty and AIDC for import of cotton. “Cotton textile exports will get a further boost as the high prices of cotton were blunting the competitive edge,” Mr. Sakthivel said. He added that India had increased its market share in apparel exports to the U.S. and many other countries recently and the signing of the free trade pact with the UAE and Australia would further accelerate the trend.
