Apparel Export Promotion Council urges government to remove import duty on cotton to boost exports
Jan 28, 2022
New Delhi [India], January 28 : The Apparel Export Promotion Council (AEPC) has urged the government to remove import duty on cotton for boosting apparel exports, as one of its key Budget recommendations for promoting the Indian apparel industry.
In an exclusive interview with ANI, AEPC Chairman Narendra Goenka, who believes apparel exports would touch $20 billion in fiscal 2022-23, said the biggest hurdle is high raw material prices and removal of import duty on these could give a major fillip.
"We need to stop import duty on raw cotton. It is our major demand because raw material prices in India are very high. Cotton prices have gone up by almost 70-80 per cent in the last one year. A solution could be the removal of 11 per cent import duty on cotton. So that the mills can import cotton at lower prices. Cotton and yarn prices have gone up by 70-80 per cent and that is creating hurdles for garment exports. So, that is our major one-point demand from the Budget," said Goenka.
Further, he said that the government should also reintroduce the duty-free facility for importing trimmings and embellishments that foreign buyers demand from outside India. He said this should be provided as the imported items are finally exported.
"Trimmings and embellishments like tags, labels and buttons that are used for branding and are nominated by the buyers were allowed duty-free till two years back. That has been removed and we are requesting to reinstate that facility because we have to import those trimmings from buyers' nominated sources. We have requested the government in this budget to reinstate that facility for up to 5 per cent of our FOB based on last year's performance," Goenka said.
He said that the import duty on raw materials has made Indian apparel expensive and less competitive in the international market. Apart from the removal of import duties, Goenka feels there is an urgent need for building additional production capacity and promoting brand India as there is good demand in the export market.
"We need to expand our production capacity. That is our biggest challenge because there is a good demand. And, then create a little more positivity about Indian apparel. We need to create a brand India by some export promotion efforts in the international market where people can see what we have. We have fibre to fashion capability. We have raw material abundance and we also create good fashion. We want to project this. We are sustainable, compliant. We want to create a global image of brand India so that it helps us increase the confidence of our buyers and retailers," he said.
Goenka also stressed upon the need to fast track negotiations and sign Free Trade Agreements (FTAs) with major buying destinations like the EU, the UK, Australia and others. This will remove the duty disadvantages that Indian apparel faces, he said.
