Chennai, May 16 (Ajitweekly News) Clarification on import duty waiver on cotton till September 30, reduction in margin money demanded by bankers for cotton purchases and mandating cotton and yarn stock declaration by spinning mills, are the requests of Tamil Nadu Chief Minister M.K. Stalin to Prime Minister Narendra Modi.
Pointing to the rise in prices of cotton and yarn, Stalin in a letter to Modi said there was a growing discontent in the textile industry and weavers.
In order to rein in the price rise and consequent disruptions in the textile value chain, Stalin in a letter to Modi urged: “As an immediate measure, stock declaration for cotton and yarn may be made mandatory for all spinning mills so that ginners and cotton traders can obtain actual data on cotton and yarn availability.”
Stalin also requested the Central government to issue a clarification that import duty on cotton is waived for all contracts entered up to September 30, 2022.
He said the Union government has waived import duty on cotton till September 30. However, as it takes more than three months for the consignment to reach Indian ports after the contract is entered into, effectively import duty waiver will be available only up to June 30, 2022.
As to the cash credit limits to the spinning mills, Stalin said currently the banks provide it for three months for the purchase of cotton while the cotton availability with the farmers extends up to four months and thereafter, it is available in the market for another four months.
“Therefore, the cash credit limit of the spinning mills to purchase cotton may be extended up to eight months in a year. Similarly, margin money sought by the banks at 25 per cent of purchase value may be reduced to 10 per cent since banks are calculating the purchase stock value at lesser rates than the actual purchase/market rates in the market,” Stalin said.