Cotton stakeholders believe, increasing customs duty on cotton may impact India’s advantage in premium/ high-end garment exports to the world. Stakeholders also fear losing international market, especially US and Europe, to neighboring competitors Bangladesh and Pakistan as well as Vietnam.

The Cotton Textiles Export Promotion Council says a hike in customs duty will lead to a higher cost for value-added products including fabrics, made-ups and garments. The Southern India Mills’ Association (SIMA) had also demanded a roll-back of the decision soon after the Budget.

As per Cotton Association of India (CAI), India’s cotton imports for the year 2019-20 (October to September) were projected at 15.50 lakh bales, whereas for the year 2020-21 it is estimated to be around 14 lakh bales, of which 4.5 lakh bales of cotton was imported as on December 31, 2020.

As per the trade insiders, the cotton textiles/garments using 51 per cent or more Pima cotton can qualify for Supima label, which commands higher price and premium in the US market as well as other prominent garment markets.