US cotton industry seeks removal of 11% import duty on short staple cotton

The US industry body Cotton Council International on Tuesday asked the government to remove 11 per cent import duty on short staple cotton, in a bid to bring down its prices for the benefit of the Indian textile industry.

In February, the government had removed the import duty of 10 per cent for cotton with a staple length above 32 millimeters (mm), also known as Extra Long Staple (ELS) cotton.

However, the import duty of 11 per cent on imported cotton below staple length of 32 mm remains in effect.

On February 1, 2021, the government announced an 11 per cent duty on imported cotton, effective February 2, 2021. The duty comprised of five per cent basic customs duty, five per cent tax, and one per cent social welfare charge.

“As US Cotton industry we are here to have a conversation with our partners and to get a better understanding of the challenges and how we can help facilitate a positive change. One of the issues that is a challenge to us is the import duty of about 11 per cent that is applied to imports of cotton coming from the US.

“It has been levied since 2021 and we have been successful in having it removed from American PIMA or any imports of cotton that is 32 mm or longer. However, it is still in imposition for cotton that is coming in for the shorter staple. One of the challenges for that is the negative impact for the domestic textile industry,” Marc A Lewkowitz President and CEO, SUPIMA, said.

Speaking to PTI on the sidelines of a roundtable organised by Cotton Council International, he argued that India is a big cotton textile industry and cannot produce enough cotton by itself specifically to satisfy all of the domestic need.

According to estimates, ELS cotton production accounts for less than one per cent of India’s cotton production and will therefore benefit textile mills manufacturing products (yarns, apparels, and home textile products) with imported ELS cotton.

The United States, Egypt, and Israel remain major suppliers of ELS cotton to India.

First Published: Jun 19 2024 | 5:04 AM IST