MUMBAI (Reuters) - India’s imposition of 10% duty on cotton imports is unlikely to dent buying, the head of the Cotton Association of India (CAI) told Reuters.

The 10% import duty imposed by the world’s biggest cotton producer was announced by Finance Minister Nirmala Sitharaman in her budget speech to parliament on Monday.

“There won’t be any impact on imports. The textile industry needs extra long staple cotton,” said CAI’s president, Atul Ganatra, adding that this type of cotton is in short supply on the domestic market.

Indian textile mills have already imported 600,000 bales of cotton in the 2020/21 marketing year that started on Oct. 1, with a further 800,000 bales likely to be sourced from outside the country during the rest of the season, Ganatra said.

The country is expected to produce 36 million bales in the current marketing year, against local demand of 33 million bales, though supply of extra long staple cotton is negligible, the CAI says.

India imports long staple cotton mainly from Egypt and United States. It exports surplus cotton to Bangladesh, Vietnam and China.

Basic customs duty on man-made fibres (MMF) such as caprolactam, nylon chips and nylon fibre and yarn were cut to 5% from 7.5% in the budget.

India is a net importer of these products and the reduction would make the MMF industry more competitive globally, said Ashok Juneja, president of India’s Textile Association.

Reporting by Rajendra Jadhav and Sachin Ravikumar; Editing by David Goodman