Mixed reaction on extra-long staple cotton duty cut, industry eyes more relief.

The textile industry in India is happy as the government eliminates import duty on extra-long staple (ELS) cotton. This move, however, comes with mixed reactions on its impact.

Sanjay Jain, ex-CITI chief, welcomed the step, hoping for similar relief on other cotton varieties. He highlights India's dependence on ELS imports and the cost disadvantage faced by value-added products due to the duty. He sees the removal as correcting an anomaly that hurt competitiveness without benefiting farmers.

Others like Bharat Shah, a power loom owner, believe the impact will be limited due to the small share of ELS cotton used. He expects a temporary psychological boost and no major shift in market dynamics. A Delhi yarn trader also downplays the effect, citing the minimal consumption of ELS compared to total cotton needs.

The news initially triggered Rs 600 per candy drop in cotton prices in Gujarat, reflecting buyer hesitancy. However, prices recovered by Rs 200 on Wednesday, suggesting a wait-and-see approach.

While the ELS duty cut is applauded, the industry awaits broader action on other cotton varieties to truly enhance competitiveness and boost exports. The government faces the challenge of balancing industry needs with farmer protection through minimum support prices (MSP).