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TEA seeks calibration in cotton yarn exports

04 Apr '11
2 min read

The Directorate General of Foreign Trade (DGFT) should not lift the ceiling imposed on export of cotton yarn, as this would have a direct effect on the downstream industries and would not only lead to a dearth of the commodity, but would also cause its prices to shoot up, the Tirupur Exporters Association (TEA) claimed.

As stated under the government notification issued on March 1, the DGFT has relaxed the export rules for cotton yarn and unlike under the earlier policy where exports were allowed under licence, the DGFT now allows cotton yarn exports after registrating with it.

TEA President, A Sakthivel in a statement said that, the notification has been issued at a time when the knitwear sector is already confronted with several issues, following the rise in the yarn prices and closure of dyeing factories.

It would become difficult for the domestic value-added garment sector to compete with other countries that import cotton yarn from India, owing to the comparative benefits that the exporters in these countries enjoy over the Indian exporters in terms of the bank interest rates, power charges, VAT refunds, etc. Also, this would enhance the competiveness of the exporters in those competing nations who would undermine the market share of Indian exporters, he said.

This would not only cause the sector to lose the extra foreign exchange, but would even cause lakhs of workers to lose their jobs.

The TEA President even forwarded a letter to the Union Commerce and Industry Minister Anand Sharma, requesting him to implement month-wise or quarterly calibration of yarn exports or impose count-wise cap in the range from 1s to 40s and to cap yarn exports at 720 million kg, like in the last fiscal year.

Fibre2fashion News Desk - India

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