High cotton price: Minister of Finance holds meeting with textile industry

Nirmala Sitharaman, Union Minister of Finance and Corporate Affairs, held a virtual meeting with industry associations to discuss the urgent measures to be taken to control the increase of cotton and cotton yarn prices.

From Tamil Nadu, R. Gandhi, Minister for Handlooms and Textiles; Tiruchi Siva MP; Dharmendra Pratap Yadav, Principal Secretary, Handlooms, Handicrafts, Textiles and Khadi Department; and Dr. Vallalar, Commissioner (Textiles) also participated in the meeting.

Dr. A. Sakthivel, President, FIEO; R. Rajkumar, Chairman, CITI; Raja M. Shanmugham, President, Tirupur Exporters’ Association (TEA) and other representatives of the industry were also present in the meeting.

The issue of removal of 11 per cent import duty on cotton, removal of cotton from future trading and the need to redefine the role of CCI to control cotton prices was highlighted in the meeting.

Nirmala Sitharaman was concerned about the impact the removal of import duty on cotton would have on farmers and requested to send a representation immediately.

It was also said by the stakeholders that if farmers would get affected, then MSP can be increased to save farmers’ interest.

Both the farmers,who are at the first leg of the textile value chain, and the garment manufacturers,who are at the last leg, are always vulnerable. And there is a need to be handheld at the time of crisis.

Further,the garment industry is predominantly made of MSMEs. Raja M. Shanmugham requested for the support through ECLGS to meet the financial requirements of MSMEs. Interest Equalization Scheme is to be restored, which is the need of the hour.

Various stakeholders highlighted that exports of raw cotton and yarn need to be disincentivised. Import duty on cotton needs to be lifted to maintain the international parity.

Cotton being the main raw material for the entire textile value chain should not be allowed to get traded in the stock exchanges on a notional basis, which creates an artificial demand affecting the entire value chain. Hence, removal of cotton from the commodities list is required.