Cotton price difference affects Indian textile industry
Foreign news reported on December 29 that the price of raw cotton in India is currently at least 10-14% higher than in the international market. This difference is affecting the Indian textile industry. Therefore, stakeholders urge the government to cancel the 11% import tariff on cotton to create a level playing field for the domestic industry.
India’s benchmark S-6 grade cotton is currently quoted at 60,000 rupees per 356 kilograms, which is equivalent to 169 rupees per kilogram. In comparison, ICE cotton futures are trading at about 152 rupees per kilogram.
Slowing demand in the export market is another factor of concern for the industry, especially textile and garment exporters. The industry is therefore seeking active support from the government to be able to face the twin challenges of the global market.
An industry expert in Tamil Nadu said that Indian cotton is more expensive than international cotton, including China. “As a result, the country’s exporters are unable to obtain orders from the global market. The Indian government currently imposes an 11% import tariff on cotton, which undermines the viability of international trade.”
Another industry insider in Delhi said that Indian cotton prices are not competitive in the global market. “The domestic market is also switching from cotton to polyester faster, and consumption is reduced. Therefore, the government needs to cancel import tariffs to make the price of raw cotton consistent with the international market price.”
Besides removing import duties on cotton, the industry also wants the government to formulate stimulus packages to support the spinning, textile, manufacturing, apparel and home textile industries.
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