The Indian Government has allowed duty-free import of 51,419 MT Extra Long Staple (ELS) cotton (minimum 28 mm) from Australia under the Economic Cooperation and Trade Agreement (ECTA). As per a notification issued by Directorate General of Foreign Trade (DGFT), Australia enjoys duty free market access of India for Extra Long Staple cotton (minimum 28 mm).
Australia government can allocate tariff rate quotas (TRQs) to its exporters or producers by giving them TRQ certificates up to the quota fixed for each commodity.
Of the 51,419 MT quota allowed by the Indian government, 419 MT ELS cotton (HS code 52010020) at zero import duty is for calendar year 2022. The remaining 51,000 MT will be quota for next year i.e., calendar year 2023.
Indian traders have mixed reactions on allowing duty-free import of cotton amid limited supply and higher prices during the cotton arrival season. Few traders expected easing in cotton prices in domestic market, but others argued that there is little room for easing in cotton prices due to limited quota and matching prices in the Australian market.
According to market report India imported cotton (HS code 5201) worth $193.277 mn during the first nine months of 2022. India had imported 54.861 mn kg cotton in the said period. Its cotton import jumped this year compared to the import of $66.011 mn (30.344 mn kg) in 2021. The inbound shipment was $6.352 mn (3.358 mn kg) in 2020, $33.068 mn (17.284 mn kg) in 2019, and $57.451 mn (27.268 mn kg) in 2018.
