Monthly exports of cotton yarn is at a 5-year-low
Export of cotton textiles continued their downtrend and registered a fall of 24 per cent during the April-July period. The provisional data released for the first three weeks of August also showed a decline of 25 per cent month-on-month.
Expressing deep concern about the declining trend in cotton textile exports, Dr KV Srinivasan, Chairman, Cotton Textile Export Promotion Council, said that a commodity-wise analysis of the data showed that while garment and made-up exports have shown a growth, exports of cotton yarn and fabrics continued their declining trend. “A sharp and precipitous decline, especially of cotton yarn during the last four months by about 35 per cent, has led to a crisis-like situation in the spinning industry,” he said.
In fact, the monthly exports of cotton yarn are at a 5-year-low of 59-60 million kgs. Exports to major markets such as China has halved, and exports to Bangladesh and Korea has fallen 38 per cent and 45 per cent.
Policy intervention needed
Srinivasan said made-ups and garments exports are recording a positive growth mainly on account of RoSCTL (Rebate of State and Central Taxes and Levies) scheme extension. This measure has not only ensured that taxes are not exported by the garment and made-up sector, but also enabled them to regain competitiveness.
Texprocil has appealed to the government to also cover cotton yarn and fabrics exports in the ROSCTL schemes and refund the state and central taxes.
“These taxes account for seven per cent of the value, and will go a long way in mitigating the serious situation in the spinning and weaving sector,” said Srinivasan.
Many of the competing countries are gaining access in various markets such as China, South Korea and Turkey, mainly on account of the preferential access given to them by the importing countries, leading to the further erosion of India’s market share, he added.
While Vietnam has increased its exports of cotton yarn to China by 17 per cent during the last four months, India’s share has declined by 16 per cent in the same period.
In view of the sharp decline in exports, many production units are shutting down and need urgent policy support. He also requested the government to extend the 3 per cent interest equalisation to cotton yarn.
“These measures will help the cotton yarn sector and the spinning industry at large to minimize their losses and regain their competitiveness,” he said.