CHENNAI: The Apparel Export Promotion Council (AEPC) has sought urgent intervention of the government for imposing quantitative restrictions and export duty on export of cotton yarn from India. In a letter to the union textile minister, the council raised concerns about the rising cotton yarn in the last four months due to which the entire value chain in the industry has been affected.
“We request your kind immediate intervention to increase the supply of yarn to domestic manufacturers. We suggest that quantitative restrictions should be imposed on exports of cotton yarn, specifically on cotton yarn of 26 counts and above,” said AEPC chairman A Sakthivel. He added that the rate of increase in yarn prices far exceeds that of cotton prices.
The rising prices of cotton has affected the handloom and powerloom weavers badly and they are missing on export orders.
The chairman also went on to add that the entire country is the loser if yarn is exported at the cost of domestic and export oriented manufacturing industry. “It is akin to exporting jobs at a time when the entire country is doing its best to get people back to work,” he said.
He further recommended that export duty should be levied on exports of cotton yarn. “This will result in a sharp decline in domestic yarn prices and an increase in value addition and employment in the country. This will also help in increasing garment exports. And, it will result in only normal profits accruing to yarn spinners, not the super normal profit owing to the profiteering currently happening,” he said.
Meanwhile, the council also urged cotton mill owners to cut yarn prices by Rs 20 per kg to support the growth of the sector as rising rates impact cost competitiveness in the wake of in the wake of Cotton Corporation of India reducing prices.