Lok Sabha Question No. 3265 (UNSTARRED), answered on 2021-08-09
Subject: Import Duty Restrictions
Ministry: FINANCE
Asked by: Y. S. Avinash Reddy, Raghu Ramakrishna Raju Kanumuru

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

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## LOK SABHA

## UN-STARRED QUESTION NO.3265

## TO BE ANSWERED ON MONDAY THE 09 TH  AUGUST, 2021 SRAVANA 18, 1943 (SAKA)

## IMPORT DUTY RESTRICTIONS

3265. SHRI Y.S. AVINASH REDDY:

SHRI KANUMURU RAGHU RAMA KRISHNA RAJU:

Will the Minister of FINANCE be pleased to state:

- (a)  whether the Government has taken note of the import duty restriction imposed in the month of February this year and if so, the details thereof;
- (b)  whether the Government has taken note that the 10 per cent duty levied on cotton imports are driving  the  garments  industry  into  difficulties  as  the  cost  of  production  of  garments  is  increasing leading to an increase in the prices of finished garments; and
- (c) whether the Cotton Association of India has requested the Union Government to scrap the 10 per cent duty levied on imports of cotton and if so, the details thereof along with the steps being taken by the Government in this regard

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

- (a):  Certain representations have been received from trade associations, stating that difficulties are being faced  by  textile  and  apparel  industry  due  to  imposition  of  5%  Basic  Customs  Duty,  and  5% Agriculture Infrastructure and Development Cess on imports of Raw Cotton in Union Budget 2021-22.
- (b):  The  decision  to  impose  5%  Basic  Customs  Duty,  and,  5%  Agriculture  Infrastructure  and Development Cess on imports of Raw Cotton in Union Budget 2021-22 has been taken to benefit domestic cotton farmers. Imports of cotton have surged significantly in last few years, even though India is the largest producer of cotton in the world. All varieties of cotton, including those which were produced  in  India  were  being  imported  in  large  quantities.  This  has  impacted  the  Indian  farmer adversely. Cotton is domestically available in excess of demand. Therefore, the garment industry can source the domestically produced cotton including high quality and extra-long staple cotton. Reduced import  dependence  would  help  the  domestic  garment  industry.  Garment  exporters  would  not  be affected as exporters may avail benefit of schemes like advance authorization, duty drawback, EoU, SEZ etc.  Further,  RoSCTL  scheme for  garment  and  made-ups  has  also  been  extended  till  March 2024. Further incentives under various schemes are also being provided to Garment sector.

(c): Cotton Association of India has requested the Government to withdraw the 10 per cent duty levied on imports of cotton stating that due to the imposition of import duty, cotton has become costly and it is not in the interest of domestic textile industry. As stated in part (b), the decision to impose duty on imports of cotton has been taken to benefit domestic cotton farmers which in turn would help in higher domestic  value  addition  and  reduce  import  dependence.  The  garment  industry  is  also  being supported by the Government as detailed above.

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