Chennai: Chief Minister M K Stalin urged Union Textiles Minister Piyush Goyal to make efforts to remove the 11% Import Duty on cotton, revamp the commercial terms and conditions prescribed by the CCI for e-auction of cotton and extend 5% interest subvention to the spinning mills towards procurement of cotton during peak season.
In a letter to the Union Minister on Monday, Stalin said apparel manufacturers were facing a grave situation of cotton and yarn price volatility having its impact on the prices of fabrics and garments.
‘I understand that one of the major reasons for the cotton price volatility is due to the imposition of 5% Basic Customs Duty (BCD), 5% Agriculture Infrastructure Development Cess (AIDC) and 10% Social Welfare Cess imposed on these components in the Union Budget 2021-22 which amounts to imposition of an overall import duty of 11%,’ he said.
Another reason for spurt in cotton prices was the bulk discount offered by the Cotton Corporation of India (CCI) to the traders who procured almost 70% of Minimum Support Price (MSP) cotton auctioned by CCI at a lower rate during the cotton season due to availability of 90 days free period and thereafter speculated the market, Stalin said.
‘If this situation is not reined in, a large number of apparel and home textile units may soon become unviable resulting in closure and consequent large scale unemployment and industrial unrest,’ he said.
Stalin told the Union Minister that the textile industry was the second largest employment provider in the State and Tamil Nadu accounted for one third of the textile business in the country.
‘The present crisis has led to mass cancellation of export orders and hardships in fulfilling long term export commitments,’ he said.
Requesting Goyal to direct the concerned Ministries to intervene and take measures at the earliest to remedy the situation, protect the Textile Industry and prevent loss of jobs.
