The Hindu Business Line : Maharashtra to seek dumping duty on US cotton imports

Mr Harshvardhan Patil, Minister for Marketing, Government of Maharashtra, told Business Line that a decision to this effect was taken on Monday and the Chief Minster, Mr Vilasrao Deshmukh, would be personally conveying it to the Commerce Minister.

"The strong cotton lobby in US ensures them a huge subsidy and we had to resort to this measure. We have recommended to the Commerce Ministry that the present import duty on cotton should increase from 10 per cent to 50 per cent. Moreover, a special subsidy should also be given on cotton from Maharashtra by the Union Government so that we can match international prices," Mr Patil said.

Excess cotton production, a slump in cotton prices and monopoly procurement scheme for cotton has combined to make the going tough for the State Government, which is finding it difficult to offload its current inventory of 18 lakh bales (170 kg a bale).

"The upcoming season would be more difficult as we are expecting a bumper crop," the Minister said. Cotton production is likely to reach 250-300 lakh quintals in 2005-06, a 30 per cent rise in production, a result of farmers taking to Bt Cotton, he said.

According to an industry expert if India invokes anti-dumping law, it will have to prove that US subsidy is hurting the domestic market. India would have to file before the Dispute Settlement Board in the WTO and establish a cause-effect relationship between US dumping of cotton in Indian market and loss of business in India, he said.

In 2004-05, India imported eight lakh bales of cotton from the international market and exported about 10 lakh bales. India, being a big exporter of cotton, will have a week case against US subsidy, the expert said. Maharashtra accounted for 45 lakh bales of the total cotton production of 75 lakh bales in the country this year. The domestic consumption of cotton is 55 lakh bales.

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