I would really appreciate it, if a native speaker could explain to me why "its" is grammatically incorrect.

"In English, words such as it and its genitive form its have been used to refer to human babies and pets, although with the passage of time this usage has come to be considered too impersonal in the case of babies, with many usage critics arguing that it demeans a conscious being to the status of a mere object. This use of "it" also got bad press when various regimes used it as a rhetorical device to dehumanize their enemies, implying that they were little more in authority than other animals. The word remains in common use however, and its use increases with how impersonal whatever the speaker is referring is to them. For example someone else's dog is often referred to as it, especially if the dog isn't known by the speaker. A person would rarely though, say it when referring to their own cat or dog. Examples:

* The baby had its first apple.
* They are taking their dog to the vet, as they said it looked ill.

"It" is still used for idiomatic phrases such as Is it a boy or a girl? Once the gender of the child has been established, the speaker or writer then switches to gender-specific pronouns.

Some people propose using "it" in a wider sense in all the situations where a gender-neutral pronoun might be desired. The advantage of using an existing word is that the language does not have to change as much. The disadvantage is the possibility of causing offense. This usage of it is currently very rare, and most commentators feel that it is unlikely to catch on."