Remove duty imposed on cotton import, consider ban on export: Tiruppur exporters to Centre

The exporters alleged that middlemen and traders are now creating havoc by increasing the price of cotton to the hilt

Protesting the ever-increasing cotton prices, exporters in the knitwear hub of Tiruppur on Monday demanded that the Centre remove the import duty imposed on cotton and consider imposing a ban on the export of cotton to bring down the price.

In a letter to Union Textiles Minister Piyush Goyal, the influential Tiruppur Exporters’ Association (TEA) alleged that middlemen and traders are now creating havoc by increasing the price of cotton to the hilt, which is unprecedented especially during the cotton arrival season.

“Our apprehension is that the price hike of cotton does heavily impact the garment exporting units, lead to loss of exports including employment. Moreover, the sustainability of the MSMEs garment units would also be much doubtful,” TEA President Raja M Shanmugham said in the letter.

He said exporters’ have always supported cotton-producing farmers getting better prices for their production of cotton but blamed the middlemen and traders for the ever-increasing price.

“It may be noted that the 11 per cent total import duty existing on cotton has been the reason for the cartelisation of vested players to increase the domestic cotton prices, making an abnormal profit at the cost of value-added garment sectors,” he said.

Shanmugham said the TEA wants for removal of the duty imposed on cotton, steps to break the cartelisation and also look at the possibility of imposing a ban on cotton exports. The knitwear hub in Tiruppur, which accounts for 46 per cent of India’s exports in the sector, has been raising its voice against the ever-increasing prices of raw materials like cotton and yarn.

The TEA has also written to Textile Mills Associations, and others to advise their members not to increase the cotton yarn prices “disproportionate to increase in cotton prices as that will totally affect the value-added knitwear garment sector.”

The increase in price at regular intervals cause huge losses to exporters who fix price for their orders at the time of signing, exporters said.

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