The government has extended the import duty exemption for cotton to October 31.
In a notification dated July 4, the Ministry of Finance, said the government has amended its notification dated April 13 and the import duty exemption that was given for cotton till September 30 has been extended to October 31.
The notification evoked mixed response from the textile industry.
Industry sources said the trade and industry had contracted 17 lakh- 18 lakh bales of cotton till now from other countries so far this season. With container shortage, only about 15 lakh bales or lower would reach India by September. The remaining bales would land only later and hence, it was essential to have the duty exemption extended till the end of October. The mills needed quality cotton till mid-November and only after that, arrival of new season domestic cotton would pick up.
However, one of the textile mill owners said domestic cotton was available at ₹85,000 a candy now while imported cotton cost ₹ 1.1 lakh per candy. So, mills that had already booked overseas cotton, would now get it at relatively higher prices. Besides, yarn demand was low.
A cotton trade source said that if the notification had been issued last month, more cotton would have been contracted and it would have eased the cotton situation in the country much earlier.
