;
Home / Knowledge / News / Textiles / Restore MEIS & IES benefits for cotton yarn: CITI to govt
Restore MEIS & IES benefits for cotton yarn: CITI to govt
14
Dec '17
Restore MEIS & IES benefits for cotton yarn: CITI to govt
The Confederation of Indian Textile Industry (CITI) has urged the Central government to immediately restore Merchandise Exports from India Scheme (MEIS) and Interest Equalisation Scheme (IES) benefits for cotton yarn. During April-September 2017, India’s cotton yarn exports fell 10 per cent to 464 million kg from 517 million kg during same period in 2016.

Indian cotton yarn exports are struggling due to various policy lapses, said CITI chairman Sanjay K Jain in a press release. “There is an urgent need to restore the MEIS and IES benefits for cotton yarn immediately. There are no reasons why other segments in the textile value chain should get this benefit including MMF yarn while cotton yarn should not get the same.”

He pointed out that Indian spinning mills performed well in exports during 2013-14 taking advantage of the 2 per cent incremental export incentive, 2 per cent interest subvention and 3 per cent focus market incentive and achieved a record export of around $4,555 million of yarn. However, in 2014, the benefits of export incentives provided to cotton yarn were withdrawn due to some inexplicable reasons. During the year 2016-17, the cotton yarn export was only around $3,352 million, registering a decline of 26 per cent. This is despite adding over 3 million spindles and 62,000 rotors spinning capacity during the same period.

Jain further stated that India is today exporting more than 60 lakh bales of cotton every year i.e. about 20 per cent of the total cotton production. “Exporting of raw cotton bales instead of value addition by converting to yarn is leading to loss of valuable foreign exchange, employment and better remuneration to farmers.”

“When export benefits such as MEIS and IES were introduced …, every other segment in the textile value chain including MMF spun yarn were provided with the benefits while cotton yarn was not considered. This policy decision has adversely affected cotton yarn exports to China, the largest importer of cotton yarn,” Jain said in the release.

During the last few years, China has shifted from India to Vietnam/Indonesia as they have duty free access while Indian yarn carries 3.5 per cent import duty. From 2013-14 to 2016-17, there has been a decline in India’s cotton yarn exports to China by 42 per cent while exports from Vietnam and Indonesia have increased at a remarkable rate of 83 per cent and 14 per cent respectively in the same period.

He added that profit margin in the yarn industry are thin and profits are made with volumes. “Withdrawal of the export incentives for cotton yarn has reduced our competitive edge by increasing our prices to the tune of 5 to 6 per cent. Many old textile mills have been shut down while new capacities are coming up at the cost of tax payer’s money. Over the last five years, spinning EBITDA margins have decreased at an alarming rate of 21 per cent per annum.”

Cotton being a seasonable commodity available for four months, 3 per cent IES benefit is essential to maintain six to nine months cotton inventory and also to ensure consistency in quality of yarn supplied, at a lower interest cost. Interest rate in India ranges between 10 per cent and 12.5 per cent while interest rate in competing nations ranges much lower between 4 per cent and 6 per cent. (RKS)

Fibre2Fashion News Desk – India


Must ReadView All

Vietnamese garment firms plan to boost exports to Canada

Apparel/Garments | On 11th Dec 2018

Vietnamese garment firms plan to boost exports to Canada

As Vietnam is yet to sign a free trade agreement with Canada, so the...

Courtesy: Alizilla

Textiles | On 11th Dec 2018

Belgium, Alibaba promote inclusive global trade under eWTP

The Belgian Government and China’s Alibaba Group recently announced...

Courtesy: Kai Pilger from Pexels

Textiles | On 11th Dec 2018

India's textile-apparel exports fell slightly in H1 FY19

India’s overall textile and apparel exports in H1 FY19 stood at $18.4 ...

Interviews View All

Md Hanifur Rahman, Aman Group

Md Hanifur Rahman
Aman Group

The level of understanding the job role and organisational requirements...

Top executives, Retailers

Top executives
Retailers

Weak rupee breeds inflation

Victor Chao, Esmetex

Victor Chao
Esmetex

‘In future, clothing boundary lines will become increasingly blurred.’

Will Qian,

Will Qian

Honghua Digital Technology Stock Co., Ltd. specialises in the R&D,...

Marcello Galvanin,

Marcello Galvanin

Galvanin has more than 50 years of experience in the production of textile ...

Siddhachakra Weaving (Badiya Fashion),

Siddhachakra Weaving (Badiya Fashion)

Ahmedabad-based Siddhachakra Weaving Pvt Ltd was established in 2011 under ...

Isabel Herranz, European School of Business & innovation

Isabel Herranz
European School of Business & innovation

Cutting-edge ideas like the Internet of Things and artificial intelligence ...

Urs Stalder, Sanitized AG

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Kevin Nelson, TissueGen

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Madhu Jain, Madhu Jain

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Mike Hoffman, Gildan Activewear SRL

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Jay Ramrakhiani, Occasions Elegance Wear

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


December 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search