Piyush Goyal directs all stakeholders to resolve cotton price issues; warns of govt intervention and its impact on value chain

Addressing the meeting, Goyal said the Centre will "actively consider" the demand of the spinning sector for exemption from import duty on those import contracts in which bills of lading are issued up to September 30, 2022. The Minister called upon the spinning and trading community to ensure hassle-free supply of cotton and yarn first to the domestic industry and appealed to divert only surplus cotton and yarn for exports.

Textile mills struggle as cotton price hits 11-year high

He cautioned that export should not be at the cost of the domestic industry, which is the largest generator of employment in the country. The Minister emphasized the need for making better quality of seeds available to improve productivity of cotton farmers.

He stressed the need for handholding of cotton farmers, besides extending all possible support to stakeholders engaged in backward and forward integration. Goyal also announced the formation of Cotton Council of India under the Chairmanship of Suresh Bhai Kotak.

The council will include representation from Ministries of Textiles, Agriculture, Commerce, Finance, Commerce and Industry, Cotton Corporation of India and Cotton Research Institute. The first meeting of the proposed council will be held on May 28 to discuss, deliberate and prepare a robust action plan for bringing out a tangible improvement in the cotton segment.

The predominantly cotton-based textile industry is facing a long-drawn recession on the cotton front as the cotton price increased from Rs 44,500 per candy in February 2021, when an 11 percent import duty was levied on cotton, to Rs 90,000 per candy in March 2022.

The steep increase in cotton price and its impact on the prices of yarns and fabrics is severely impacting the potential growth of the cotton textile value chain.

Also Read: India may place a ban on cotton export as prices double in less than a year