Ravi Sam, Chairman, The Southern India Mills’ Association (SIMA), has appreciated Union minister of textiles for boosting India’s textile and clothing exports. “Government’s initiatives like the implementation of GST, RoSCTL, RoDTEP, removal of anti-dumping duty on PTA, MEG, PSF, VSF, Acrylic Fibre, etc, enabled the industry to boost exports by 18 per cent to $39.73 billion in 2021-22,” he says. Measures like One District, One Product (ODOP) and Production Linked Incentive (PLI) Scheme also boosted exports at grass root levels, he added. Having exceeded the export target by 25 per cent to record $15.06 billion in 2021-22, the industry now aims to increase exports by 25 per cent to $16.96 billion during the year 2022-23, he added.

India-Australia trade to reach $50 billion in 5 years

Sam appreciated the Ministry for finalizing the Indo-UAE trade and Indo-Australian trade agreements within a short span of time. Such agreements reflect the trust created by India amongst various trade partners such as UK, Canada and other countries. The estimated bilateral trade of $50 billion between the two countries in five years would enable India to import high quality cotton from Australia and export high value added textiles and clothing products to the country.

Duty-free imports to relieve industry woes

He also appreciated allowing duty-free import of around three lakh bales of having staple length 28 mm and above from Australia under the ECTA. Earlier, an industry delegation comprising Members of National Committee on Textiles and Clothing (NCTC) had requested the textile ministry to allow duty-free cotton imports to enhance cotton textile export to $16.963 billion and total textiles and clothing exports by 6 per cent to $47.029 billion during the financial year 2022-23.

Sam said, the move has given a big relief to India at a time when it is facing an acute shortage of quality raw materials and is unable to compete with countries such as Bangladesh, Vietnam, Pakistan, China, etc. He hoped, the government would soon allow duty-free import of the entire cotton to help boost exports and stabilize prices in cotton knitwear clusters like Tirupur.

Achieving targets for FY2022-23

An Industry Delegation comprising Members of National Committee on Textiles and Clothing (NCTC), also submitted a joint memorandum to Piyush Goyal, Union Minister of Textiles, Commerce & Industry, Consumer Affairs and Food & Public Distribution to allow duty-free import of cotton to achieve Indian textile and clothing industry’s desired target for fiscal 2022-23. The delegation apprised Goyal about the shortage of quality cotton faced by the industry due to a decline in domestic cotton production during the current cotton season.

Import duty leads to price parity

NCTC delegation said, 11 per cent import duty on cotton is compelling cotton traders to adopt an import parity pricing policy. From January 2022, Indian cotton prices surged by Rs 15 to Rs 20 per kg. This is compelling the industry to import high quality extra-long-staple cotton, sustainable cotton, and contamination free cotton.

However, a steep increase in cotton prices and shortage of quality cotton has led to the diversion of export orders from India to Bangladesh, Vietnam, China, and Pakistan. This has led to a decline in India’s share in US bed-linen exports from an average of 55 per cent during 2021 to 44.85 per cent in the month of January 2022, the delegation added.

Drop in capacity utilization

Further, the NCTC delegation pointed out, capacity utilization in MSME segments, including handloom, powerloom, independent knitting, weaving, processing, garmenting and made-up segments has dwindled below 70 per cent as these do not have an access to advance authorization scheme and duty-free import of cotton.

Further the NCTC delegation added, duty-free import of cotton will not affect Indian farmers as it will not exceed 40 lakh bales during the current season. Moreover, it will take around four months’ time for imported cotton to reach textile mills and by then cotton farmers would have already sold their cotton crop for this season.