New Delhi: India has scrapped import duty on raw cotton from 8 July and withdrawn export sops to boost domestic stocks, the government said on Wednesday, raising the prospect of higher imports and lower prices.
Trade officials said local prices, which have surged more than 35% in the past year, would soften while imports by traders and textiles mills could rise to one million bales (170 million kg).
“As an immediate result, some imports will take place now and will rise gradually. This has been a long-pending demand to ensure textile mills have sufficient stocks,” Shishir Jaipuria, vice-chairman of the Confederation of Indian Textile Industry (CITI), said.
The trade body urged the government to allow duty-free imports and discourage exports to rein in prices which have spiralled despite record production. Cotton output is expected to hit a record 35 million bales in the next year.