BANGALORE, India — The Indian government, bowing to pressure from spinning mills and other textile companies, has abolished import duty on raw cotton to increase supplies and bring down domestic prices.
It also scrapped a 1 percent drawback, or rebate, to reduce the incentive for raw cotton exports.
The decision to end the 14 percent customs duty on raw cotton, announced late Wednesday, may result in higher imports from the U.S., Brazil and African nations, industry analysts said.
"This announcement will have a psychological impact and prices of cotton will come down," said D.K. Nair, secretary general of the Confederation of Indian Textile Industry.
Cotton prices have risen 40 percent since January, having a negative impact on the spinning industry and other sectors already reeling from the rupee's appreciation against the dollar. Analysts attributed the rise in prices to strong demand from China.
Indian cotton imports have been declining in recent years. In the fiscal year ending March 31, imports fell to 500,000 bales from 1.7 million bales four years ago. Imports in the 2007-2008 fiscal year are estimated at about 650,000 bales.
India's cotton production has been rising, but so have exports, reducing availability of the raw material to local mills. In 2006-2007, production was 27 million bales, but exports were 5.8 million bales. Exports reached 6.5 million bales in 2007-2008, with production going up to 31.5 million bales.
About 3,000 spinning mills in India closed for a day on Wednesday to demand scrapping of customs duty on raw cotton and a ban on its exports. Later, industry organizations welcomed the government decision.
Reports said the steep rise in cotton prices had forced at least 20 textile mills in the country to close, throwing 20,000 workers out of jobs.
From overseeing America’s fastest-growing speciality retailers to codifying cool, WWD talked to the women who are leading the way for the future of beauty. Check out our Instagram Stories to see how these women built today and are creating tomorrow. (📸: @hannah_khymych) #wwdbeauty
For @laperlalingerie's spring 2018 show, the brand chose to host their event at @thevenetianmacao. With Chinese megastars @bingbing_fan and @hubing in attendance, La Perla debuted a rock ‘n’ roll-inspired collection. The show marked the start of Sands Macao Fashion Week, which runs from October 19 to 24 — the city’s first such event. Pictured here are models backstage with glimmering eyes. #wwdfashion (📷: Cheuk-Yin To)
Trending for spring 2018: top stitch design. Gone are the days of stitch just for seams — designers are using the once-minimal detail to create strong decorative elements. (📷: Paola Testa; Styled by @andrew_shang) #wwdfashion
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)