Withdrawing incentives will affect yarn exports - NITMA

24 Apr '10

2 min read

Central government's order, to register overseas sales of cotton yarn along with that of cotton bales, has puzzled the exporters. They have also been taken back by the withdrawal of the 7.67 percent Duty Entitlement Passbook (DEPB) benefit on overseas sales of cotton yarn.

Said Ashish Bagrodia, President, Northern India Textile Mills Association (NITMA), “The latest declaration made by the government is a measure to ban overseas sales of cotton yarn. But the DEPB benefit withdrawal will reduce traders' incentives, thereby, adversely affecting overseas sales of cotton yarn.”

This will directly impact more than 45 big spinning mills in the state of Punjab and will also affect other smaller units in the surrounding areas such as Fazilka, Bhatinda and the like.

However, according to the government, this order will restrict traders from focusing more on overseas sales and the regulations will thereby, aid in the availability of cotton yarn in the local market.

During the last three months especially, due to dearth of raw cotton in the local markets, its price has increased from Rs 23,000 to 29,000 per candy, which is higher than the Minimum Support Price (MSP). A representation has been given by NITMA members to the Textile Ministry for withdrawal of these orders.

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