Pune: Textile and garment exporters have urged the government to remove the 11% import duty on cotton, as a recent surge in domestic prices has eroded margins and hurt their competitiveness in overseas markets. Local cotton prices have risen 7-8% over the past month, driven by a sharp increase in demand as costlier crude oil pushed up prices of synthetic fibres, prompting mills to shift back to natural inputs.

The industry is seeking a temporary relief on the lines of the one granted last year, when the government waived cotton import duties between August and December to ease supply pressures. The prices of ginned cotton have increased 11-12% over the past one month, as per data from the Cotton Association of India. International cotton prices have risen 12-15% during this period, as cotton was the cheapest agricultural commodity available to investors, said industry experts.

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For the export of textiles and garments, India depends on imported long-staple and contamination-free cotton, as demanded by overseas buyers. "Prices of almost all raw materials have gone up. However, as about 60-70% of the textile value chain depends on cotton, we have requested the central government to waive the import duty on cotton for three-six months," said Chandrima Chatterjee, secretary general, Confederation of Indian Textile Industries.

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The increase in crude oil prices in the wake of the US-Israeli strikes on Iran has led to a 10-60% surge in prices of almost all types of raw materials used by the textile industry,. "The supply chains of almost all raw materials have become unreliable and expensive. We cannot compete as our competitors like Vietnam and Bangladesh have access to duty-free raw materials," said Sanjay Jain, managing director, TT Limited, a Delhi based listed textile firm.