An appeal to ban export of cotton yarn

20 Nov '10

3 min read

Apparel industry urged the government to impose a ban export of cotton yarn.

Mr Rakesh Vaid - President & Chairman of Garments Exporters Association, Mr Lalit Gulati - Presient of Apparel Exporters and Manufacturers Association (AEMA), Mr Praveen Nayyar – Sr, Vice President of Apparel Exports Promotion Council (AEPC), Mr P M S UPPAL - President of Okhla Textile & Garment Cluster and Mr Lalit Thukral - President Noida, Apparel Exporters Cluster submitted a joint presentation to Mrs Rita Menon, Secretary Textiles which called on to seek help in resolving a very serious problem being faced by garment exporting community because of persistent and significant hike in price of cotton yarn.

May we seek your help in resolving a very serious problem being faced by garment exporting community because of persistent and significant hike in price of cotton yarn.

Apparel exports have remained below our potential and expectations because of various factors; more importantly the shrinking demand in both the major world markets like the US and the EU. Apart from this, there have been a number of indigenous factors, particularly high transaction costs, increasing input cost, tight credit policy, high interest rate, severe liquidity crunch, rigid and outdated labour laws, poor infrastructure, high power cost and frequent power cuts, increasing cost of wages and unprecedented steep hikes in fabric prices adversely affecting the competitive strength and performance of Indian Apparel Industry.

The recent appreciation of rupee has also further eroded the profitability of exporters. The recent reduction in duty drawback rates has also hit the exporters very hard making them uncompetitive in the international market.

The recent Government decision to allow cotton exports has resulted in steep hike in the prices of Cotton, Cotton Yarn and Fabric. The textile industry has been making repeated representations to the Ministry of Textiles requesting the Government to allow for only calibrated cotton exports.

There is a need to focus more on value added exports of garments rather than raw cotton or fabric as the value addition is over six times if the same amount of cotton yarn that is being exported is used by garment exporting units. The Government should ensure that Indian cotton is available to the domestic textile industry rather than to industries of our competitors like Pakistan, Bangladesh and China.

The Garment Export Industry is incurring heavy losses because of steep hike in the price of yarn and fabric. At this critical junction and difficult time the textile exporting community seeks your help in resolving the current crisis by imposing an immediate ban on export of cotton yarn to ensure availability of cotton yarn at reasonable prices.

We shall therefore, request you for your immediate intervention to ensure that the recommendations of the Industry to ban export of cotton yarn and to provide apparel export sector additional support of around 20 per cent to make it competitive in international market are accepted by the Government.

Garments Exporters Association

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