Global Perspective: Indian Industry Organizations Seek To Import Cotton Duty-Free

A well-known industry organization in India told the government on Wednesday that India needs to import cotton duty-free, because the rise in the price of raw materials has led to a decline in the capacity utilization of cotton mills.

India is the world's largest cotton producer. The Cotton Association of India (CAI) wrote in a letter to the Minister of Textiles that the country imposed an additional 11% tariff on cotton imports, making it economically impossible to import cotton.

The letter wrote that the price of Indian cotton is nearly 15% higher than that of cotton from other regions. The high price erodes the competitiveness of the textile industry, while reducing the capacity utilization rate to 50%.

The association said: "The abolition of tariffs will help the cotton textile industry to operate at the optimal capacity."

Industry insiders said that despite the increase in output, Indian traders were still unable to achieve cotton export, because cotton farmers who expected prices to rise in the next few months delayed sales.