The decision of the Central government to remove 11 percent import duty on cotton has been welcomed by small spinners and the industry at large. South India Small Spinners Association (SISPA) on April 14 said the removal of import duty would help the mills affected by frequent rise in the cotton prices to buy cotton at cheaper prices and also help more arrivals, SISPA President J. Selvan said in a statement.

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He thanked Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman and Textile Minister Piyush Goyal for the removal of import duty till September 30.

He also thanked Tamil Nadu Chief Minister M.K. Stalin for writing to the Centre on the plight of the textile industry. Kongunadu Makkal Desiya Katchi General Secretary E.R. Eswaran said the removal of import duty would help reduce raw material price of cotton, yarn and fabric to some extent.

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This would also help exporters compete with countries like China, Vietnam and Bangladesh, he said in a separate statement. The Confederation of Indian Textile Industry (CITI) and Southern India Mills' Association (SIMA), in a joint statement, said the Central government's decision to scrap the 11 percent import duty would protect the interests of both the farmers and the industry.

CITI Chairman T. Rajkumar and his counterpart in SIMA Ravi Sam said the farmers were able to earn record income by taking advantage of the steep increase in international and domestic cotton price during the current season.

As the farmers have sold their cotton and started preparing for sowing for the next season, the removal of import duty till September 30 would not harm them and a few traders and ginners have been hoarding cotton and speculating on the prices.

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This would be discouraged from April 14 as the industry can start importing the cotton even from the neighbouring transhipment ports like Tuticorin, Colombo, Dubai and Malaysia, the joint statement said.

The international cotton season would begin in August and the industry here would be in a position to sustain its performance with the pro-active initiative taken by the government, the statement said. In the short run, there might be some increase in the international price, but the domestic cotton price would soon decline and match with the international price besides creating a level-playing field, it said.

Owing to the import duty, the industry had been planning for stoppage of production from 15 to 30 per cent as the domestic cotton prices were not viable and MSME spinning mills could not buy any cotton in the open market even at a higher price, it said. The Central government has prevented a crisis for the industry by taking the decision of scrapping the import duty, the statement added.