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Govt likely to reopen cotton yarn export ceiling

18 Jan '11
2 min read

The ceiling on cotton yarn exports is expected to be reopened by the textile and commerce ministries. As per the ministry sources, the policy on the ceiling of cotton yarn exports is likely to be announced within two week's time.

The secretaries of both the ministries met the stakeholders from the textile industry in New Delhi, last week. The Central government had imposed a ceiling of 720 million kg on cotton yarn export, this year. The export licenses of cotton yarn producers had terminated on January 15.

About 670 million kg of cotton yarn had been exported till the above mentioned deadline. Now, the ceiling is expected to be increased in order to permit the exporters to fulfill their commitments, as has been done in case of cotton by the Union government.

According to an expert, spinning mills in India have a total capacity to export around 850 million kg of cotton yarn every year. Imposition of a ceiling on the export of cotton yarns weakens the standing of the exporters in the global market.

Since the value of yarn is twice that of the cotton, therefore Indians lose significant foreign exchange by shipping raw cotton. The country would reach an unfavorable position by exporting 720 million kg cotton yarn and 900 million kg raw cotton this year.

The spinning mills in India have been always increasing their production capacity. Every year, three million spindles are being added. This also generates job opportunities. Therefore, more attention should be given on the export of yarn and fabric rather than on cotton.

Fibre2fashion News Desk - India

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