Prime Minister Manmohan Singh has arranged a meeting on Dec 10 on bailing out the textile industry due to rise in input costs led by sharp increase in the minimum support price (MSP) of cotton in September.The Centre has increased the MSP of standard cotton (long staple) to Rs 3,000 per quintal for 2008-09 from Rs 2,030 during the previous year. The MSP of medium staple cotton has been raised to Rs 2,500 from Rs 1,800 per quintal.
The industry has protested strongly against the MSP hike, saying domestic rates will skyrocket at a time when prices in global markets are declining. The Confederation of Indian Textile Industry has cautioned that the hike in MSP will prompt domestic traders and millers to import cheaper cotton and exports may plunge by a half to about 50 lakh bales (one bale is equal to 170 kg) in 2008-09 from 100 lakh bales last year .India is projected to produce at least 320 lakh bales of cotton in the 2008-09 season.
The industry has protested strongly against the MSP hike, saying domestic rates will skyrocket at a time when prices in global markets are declining. The Confederation of Indian Textile Industry has cautioned that the hike in MSP will prompt domestic traders and millers to import cheaper cotton and exports may plunge by a half to about 50 lakh bales (one bale is equal to 170 kg) in 2008-09 from 100 lakh bales last year .India is projected to produce at least 320 lakh bales of cotton in the 2008-09 season.
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