Govt to levy Rs2,500 per-tonne duty on cotton exports

The government is in the process of imposing a Rs2,500-per-tonne duty on raw cotton exports to neutralise rising prices in the domestic market.

The measure comes after the decision of a high-level meeting chaired by finance minister Pranab Mukherjee last week. According to industry sources, the export duty had been levied for six months and the domestic textile industry has been pressing for cotton export restrictions following the steep rise in prices of the natural fibre.

The Apparel Export Promotion Council (AEPC) in a statement appreciated the measure. ''We appreciate the efforts made by textile minister Dayanidhi Maran in this regard,'' its statement said.

The Rs2,500 per tonne raw cotton exports duty is expected to moderate the prices of the commodity in the domestic market and also help the local textiles industry.

The central board of excise and customs has notified the export duty on the natural fibre, which has seen prices rise sharply in the recent past months.

Meanwhile, according to analysts, rising exports of raw cotton coupled with an appreciating rupee may negatively impact exports of textiles in FY11, though it may be limited due to revival of global demand and competitive pricing.