Ashwin Chandran, Chairman, Southern India Mills Association (SIMA) has urged the central government to withdraw the 10 per cent import duty on cotton to avoid further damage to the cotton textile value chain. Chandran has expressed concerns over the rapidly rising cotton prices in the country. Such a rise will lead to higher prices of apparel and textile goods for domestic consumers as well, he said

India’s cotton prices soared by Rs 3,800 per candy within 15 days in July due to a strong demand from the domestic market, depleting stocks and 10 per cent import duty levied on cotton.

Since the beginning of July this year, Cotton Corporation of India (CCI) increased the cotton price from Rs 51,000 to Rs 54,800 per candy of 355 kg. Prices of Gujarat-based Shankar-6 cotton increased from 43,300 in January 2021 to Rs 57,000 in July.

The high demand caused cotton stock with the CCI to deplete to around 9 lakh bales, which in turn pushed up the prices. The corporation had close to 115 lakh bales of cotton at the start of the current season in October 2020 and procured 92 lakh bales during the season.

Additionally, the largest cotton producer in the world, slipped down as the state of Texas faced a severe drought last year, thus causing cotton prices in India to firm up since December 2020.