The continuing decline in cotton yarn exports from April this year has left textile mills worried. Cotton yarn exports slumped 44% in July this year, compared with the same month last year.
The downward trend continued in the first week of August as well.
According to the Cotton Textiles Export Promotion Council, between April and July, cotton yarn exports fell nearly 35%.
Exports to China, Korea and Bangladesh are down. However, competing countries are increasing their share in exports to markets such as China, South Korea, and Turkey. K.V. Srinivasan, chairman of the council, urged the government to extend 3% interest equalisation for cotton yarn. “Cotton yarn exports are at a five-year low,” Sanjay Jain, chairman of Confederation of Indian Textile Industry, said.
India’s share in global textile and clothing exports has also seen a downfall.
While India was the second largest exporter of textile and clothing in 2014-2017, it has come down to the fifth position now. “The space vacated by China in textile and clothing products has been largely consumed by Bangladesh, Vietnam, Pakistan and other least developed countries,” he said.
While Indian yarn incurs 3.5% to 4% duty in China, the levy is nil for yarn exported to China from Vietnam, Bangladesh and Pakistan, according to the Southern India Mills’ Association.
“India is now seen as a gap-filling segment and not as the main feeder. It is mainly because of tariffs,” K. Selvaraju, secretary general of the association, said.
The industry is in dire need of a stable policy for exports, with a proper refund system for all the levies paid by the exporting units. The Rebate of State and Central Taxes and Levies Scheme (ROSCTL) announced by the Centre for garments should be extended to yarn and fabrics too. Further, the raw materials for MMF and viscose yarn should be available at international prices, so that more spindles convert to synthetic yarn, sources said.
