Indian Cotton Get Duty Free From Association, Textile Exports Will Boost

26 April 2022

India has exempted the customs duty on its imports of cotton till September 30 this year. The Home Textile Exporters Welfare Association (HEWA) of India claims that this allows India to reach a value of textile exports of $60 billion for the current fiscal year. Previously, in the FY22 Budget of India, India imposed the duty of 5% basic customs duty and a 5% on agriculture and infrastructure development cess on imports of cotton in the country. The decision taken has been exempted in order to boost the country’s textile exports, along with other factors contributing to influencing imports of cotton.

 

Indian Cotton Market

India is the second-largest producer of cotton in the world, with about 24% of the global cotton production. The production of cotton in India is the most valuable market as it provides the basic raw materials to the textile industry and boosts the manufacturing of apparel.

 

Around 60% of the world’s textile and garments market is contributed by Indian markets and textile manufacturing. Socially, the cotton industry of India provides livelihood opportunities to about 6 million Indian farmers and about 40-50 million people in trading & processing, as claimed by NFSW’s (National Food Security Mission) reports.

 

Indian Cotton Imports-Exports

India accounted for a total worth of $10.6 billion in cotton exports for the ending year 2021. The Indian cotton exports have a high demand in other countries, and it is evident from the shown data below.

 

India's top trading partners for cotton exports are Bangladesh with a value of $3,858.5 million (36.3%), followed by China with a value of 2,050.5 million (19.3%), and Vietnam with $624.5 million in export value (5.8%). Check out the full list of India’s exporting partners in 2021 below.

 

 

 

India accounted for a total worth of $741.5 million in imports of cotton for the ending year of 2021. The top importing countries for Indian cotton are as follows: the USA with a value of $237 million (31.9%), followed by Egypt with a value of $176.5 million (23.8%), and China with a value of $92.6 million (12.4%), along with other countries. Check out the list of importing countries below.

 

 

 

India Textile Exports

As aforementioned, India’s textile and garments market accounts for about 60% of the world’s textile and apparel. The textile industry is the largest growing industry in the Indian region. Silk, cotton, staple fibres and other fabrics are one of the most exported materials from India.

 

The representation of India’s textile industry and apparel exports below will provide you with a glimpse into the market of India for the year 2021. The highest market here is cotton with an export value of $10,603.7 million and the market with the lowest export value is jute with an export value of $29.5 million. See the full list below to understand the Indian textile market.

 

 

 The reason for exemptions is primarily due to encourage the domestic manufacturers of apparel and promote the growth of textile & apparel industries by increasing the exports through pushing the production units and providing the required amount of raw materials such as cotton.

 

 Another reason for exemption of customs duty on the imports of cotton in India can also be due to the rising rate of inflation throughout the world. The decision to waive the import duty of 10% is to allow easy imports of raw materials (cotton) to increase production and boost exports of the finished goods.