US Cotton Industry Urges Removal Of 11% Import Duty On Short Staple Cotton

The US industry body Cotton Council International on Tuesday called on the Indian government to remove the 11 per cent import duty on short staple cotton, aiming to lower prices for the benefit of the Indian textile industry.

In February, the government had removed the 10 per cent import duty on cotton with a staple length above 32 millimetres (mm), known as Extra Long Staple (ELS) cotton. However, the 11 per cent duty on imported cotton below the staple length of 32 mm remains in effect.

The duty, announced on 1 February 2021, and effective from 2 February 2021, includes a 5 per cent basic customs duty, 5 per cent tax, and 1 per cent social welfare charge. Marc A Lewkowitz, President and CEO of SUPIMA, stated, "As the US Cotton industry, we are here to discuss challenges and facilitate positive change. One significant issue is the 11 per cent import duty on short staple cotton from the US, which negatively impacts the domestic textile industry."

Speaking at a roundtable organised by Cotton Council International, Lewkowitz emphasised India's need for imported cotton to meet its domestic textile demands. ELS cotton production accounts for less than 1 per cent of India's total cotton production, necessitating imports for textile mills manufacturing yarns, apparels, and home textiles. The United States, Egypt, and Israel are major suppliers of ELS cotton to India.