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Garment body appeals to keep exports of cotton yarn in negative list
Apr '11
Mr Rakesh Vaid, President, Garments Exporters Association - GEA has expressed disappointment at the removal of cotton yarn exports from the negative list and putting it under OGL with effect from April 1, saying that this will result in unchecked exports of yarn resulting in unchecked price increases and its scare supply in domestic market.

In a letter to Shri Anand Sharma, Union Minister of Commerce and Industry, Mr Vaid pointed out that garment exporters have been undergoing serious crisis due to non-availability of adequate supply of cotton yarn at reasonable prices and requested him to put cotton yarn back on the negative list because of the extra ordinary and excessive rise in the price of cotton yarn.

He further said yarn exports constitute less than 10 per cent of overall textiles exports, but have a potential to derail exports of value added and job creating products like garments and made-ups.

Mr Vaid further pointed out that cotton yarn exports from India face little international competition, as most yarn producing nations preserve their domestic yarn supply for its industry. On the other hand, garment exports from India face stiff international competition.

Besides, being on top of the value chain, these exports are faced with high infrastructure deficiency and transaction costs.

"We hope that the government will take prompt and necessary steps to safeguard the interests of garment exporters. We also request the government to allow export of cotton only in a calibrated manner to ensure adequate and uninterrupted supply of cotton yarn at reasonable prices for the domestic industry," Mr Vaid said.

Demanding some sort of control on the export of cotton and yarn, Mr Vaid also stressed the 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 Garments exporting units.

While keeping the export of cotton yarn in negative list, Mr Vaid requested the Government to maintain the export ceiling at 720 million kg for this year also.

The Government must take immediate steps to resolve a serious crises being faced by the Textile Industry because of non-availability of cotton, yarn and fabric even at higher prices.

Garments Exporters Association

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