Garment exporters fear losing premium market over increasing customs duty

摘要

The Budget's announcement on increasing customs duty on cotton may cast a shadow on India's advantage in premium/high-end garment exports to the world, according to cotton stakeholders. This, according to the trade sources, is primarily due to the additional cost for imported cotton- mainly the extra-long-staple (ELS)-used in making high-value-added textiles and garments, which are exported globally under premium labels. ELS quality of Giza Cotton is imported from Egypt, while Pima Cotton is sourced from the US. The cotton stakeholders also expressed concerns about losing international market, especially US and Europe, to neighbouring competitors Bangladesh and Pakistan as well as Vietnam. In her Budget speech, Finance Minister Nirmala Sitharaman said that in order to "benefit farmers, we are raising customs duty on cotton from nil to 10 per cent and on raw silk and silk yarn from 10 per cent to 15 per cent." The Cotton Textiles Export Promotion Council has expressed its surprise over the government's decision. The Council said that it is concerned of a higher cost for value-added products including fabrics, made-ups and garments as a result of the hike in the customs duty.