The export of cotton yarn has dropped 35% in the first quarter of FY20 to $696 million compared to $1.063 billion in the same period last fiscal.

Quoting government sources, the Confederation of Indian Textile Industry (CITI) said that in April the fall was 21% to $266 million compared to $337 million in the same month previous year. May saw a decline of 31% to $241 million against $349 million in May 2018 and June saw a whopping decline of 50% to $188 million compared to $378 million reported in June previous year.

The export of cotton yarn has been declining since 2014 when the Union government removed all incentives for the shipments. India lost its main market China to Vietnam which has duty free access to China while our cotton yarn attracts 3.5% duty, said CITI.

The position is getting worse day by day, the industry needs rebate on state and central taxes and levies (RoSCTL) on an urgent basis to save the only textile segment where India is a leader. The government has extended RoSCTL to made-ups and apparel but totally ignored the yarn & fabric segment, CITI said.

To make things worse, Indian raw cotton price is the highest in the world despite the country being one of the largest producers. The 28% hike in MSP disrupted the prices, leading to disconnect with international prices. It is important to introduce ‘direct benefit transfer’ to farmers to ensure that industry gets international competitive prices for cotton fibre, the apex body added.

Published On : 31-07-2019

Source : Financial Express