Garment exporters are concerned that a chunk of their business may migrate to countries such as Bangladesh, Thailand, and Vietnam, since a significant increase in domestic cotton and cotton yarn prices over the last six months has rendered their products less competitive in international markets.
Unrestricted export of cotton and cotton yarn, particularly to countries such as Bangladesh, Vietnam, and Thailand, which are India’s direct competitors, and even to China, with an advance settlement, they claim, is causing a regional scarcity of these raw materials and driving up their prices. These exports are carried out at a fixed price for six months with certainty of availability.
This, in turn, is affecting India’s garment exporters, who have six-month contracts with importing countries for finished goods, according to them.
“The industry is now struggling with a lack of cotton yarn and resources, which is affecting production, employment, and exports,” explained Lalit Thukral, president of the Noida Apparel Export Cluster. “The sharp spike in cotton prices, ranging from 30% to 60% in the last six months, has also resulted in increased production costs, making it much more difficult for the firm to compete globally.”
India’s export of Indian cotton and cotton yarn has elevated by 56% up to now six months, whereas attire shipments to international markets have risen by just 24%. India’s textile and attire business supplies employment to 105 million individuals — 45 million straight and 60 million not directly. The Indian readymade garment and attire are product of pure, man-made and artificial fibres.