The Indian Textile & Apparel sector is facing turbulence due to historic high cotton prices combined with demand contraction in developed markets
Coimbatore: The Indian Textile & Apparel sector is facing turbulence due to historic high cotton prices combined with demand contraction in developed markets. Now the Industry is hoping for a robust Indian cotton crop in the new season starting from October 2022.
We ITF conducted a survey among our member entrepreneurs representing the entire value chain of Textile manufacturing to get a sense on few key friction points regarding the upcoming cotton season.
Here are the outcomes from the Survey:
1.99% of the entrepreneurs mentioned that cotton import duty will make Indian cotton prices artificially higher than International prices in the upcoming 2022 -23 cotton year.
2.81% of the participants mentioned that Indian farmers are not the real beneficiaries of the import duty imposition. All of them also stated that Traders and MNCs are the real Beneficiaries of this protection.
3.Regarding the contributing reasons for more speculations in Indian cotton, 38% of the entrepreneurs picked Traders & MNCs to be the main source for speculative trade in cotton.27 % of the entrepreneurs picked lack of scientific data as main reason for speculation.
Inference from the Survey:
Lack of Scientific Data Collection Methods & Lack of Authentic Data reg Cotton bales output is the fundamental pain point. This is helping the speculative traders & trade. Further, imposition of import duty is adding strength to the speculative trade. Expensive raw material prices compared to that in the competing countries is making our entire value chain less competitive in Exports.
The ITF is proposing the following Solutions for the industry:
1.Removal of Import Duty on Cotton to ensure level playing field with our competing countries.
2.Extracting sales data in No of bales with the help of GST portal with ref to ginners across India.
3.Installing Sim Card based Smart Meters in Ginning mills to get real time pressing data in No. of Bales.
These steps can curb speculation & also give big thrust to T&A Sector to gear up in capturing China plus one opportunity emerging in various developed markets.
We ITF conducted a survey among our member entrepreneurs representing the entire value chain of Textile manufacturing to get a sense on few key friction points regarding the upcoming cotton season.
Here are the outcomes from the Survey:
1.99% of the entrepreneurs mentioned that cotton import duty will make Indian cotton prices artificially higher than International prices in the upcoming 2022 -23 cotton year.
2.81% of the participants mentioned that Indian farmers are not the real beneficiaries of the import duty imposition. All of them also stated that Traders and MNCs are the real Beneficiaries of this protection.
3.Regarding the contributing reasons for more speculations in Indian cotton, 38% of the entrepreneurs picked Traders & MNCs to be the main source for speculative trade in cotton.27 % of the entrepreneurs picked lack of scientific data as main reason for speculation.
Inference from the Survey:
Lack of Scientific Data Collection Methods & Lack of Authentic Data reg Cotton bales output is the fundamental pain point. This is helping the speculative traders & trade. Further, imposition of import duty is adding strength to the speculative trade. Expensive raw material prices compared to that in the competing countries is making our entire value chain less competitive in Exports.
The ITF is proposing the following Solutions for the industry:
1.Removal of Import Duty on Cotton to ensure level playing field with our competing countries.
2.Extracting sales data in No of bales with the help of GST portal with ref to ginners across India.
3.Installing Sim Card based Smart Meters in Ginning mills to get real time pressing data in No. of Bales.
These steps can curb speculation & also give big thrust to T&A Sector to gear up in capturing China plus one opportunity emerging in various developed markets.