India allows duty-free imports of cotton until Sept to cool prices

An employee shifts piles of cotton at a cotton processing unit in Kadi town, in the western Indian state of Gujarat, India, April 5, 2018. REUTERS/Amit Dave/File Photo

MUMBAI, April 13 (Reuters) - India on Wednesday allowed duty-free imports of cotton until Sept. 30 as prices in the local market jumped to a record high because of a drop in the production, the government said in a notification.

The world's biggest producer of the fibre also removed the Agriculture Infrastructure and Development Cess (AIDC) on the imports, the government said.

The total import taxes on cotton was earlier 11%, said Atul Ganatra, president of the Cotton Association of India (CAI).

Duty-free imports will help textile mills, which could import around 2.5 million bales of cotton in the 2021/22 marketing year ending on Sept. 30, Ganatra said.

"Indian mills could import cotton from Australia, Brazil, African countries and Unite States, which are supplying cotton at lower prices," he said.

India's cotton output is likely to fall to 33.51 million bales in the current year from last year's 35.3 million bales, estimates CAI.

(1 Indian bale = 170 kg)

Reporting by Rajendra Jadhav Editing by Bernadette Baum

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