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The textile industry has voiced alarm over the consistent fall in cotton yarn exports in the last three months due to sharp decline in demand in importing countries such as China, Bangladesh and South Korea, besides duty-free access given by China to competing Pakistan.

Steep fall in exports

Cotton yarn export in June has more than halved to 59 million kg (mkg) in June from 120 mkg in the same period last year. In fact, the level of 59 mkg of exports logged in June was the lowest monthly export in the last five years.

In May, yarn export was down 30 per cent to 77 mkg (111 mkg) while in April it dipped 16 per cent to 90 mkg.

Overall, export of cotton yarn from India in the first quarter of the financial year ended June was down 33 per cent to 226 mkg (338 mkg).

Considering the large-scale investment in the spinning sector and sluggish demand in the domestic markets, exports are the only avenue to ensure uninterrupted production and capacity utilisation, it said.

The cotton yarn sector has been one of the pillars of the Indian textile industry and is also highly modernised. Driven by technology, it provides sustainable income to farmers.

KV Srinivasan, Chairman, Texprocil, said even though cotton yarn is a value-added product, it has been excluded from the export benefits such as interest subvention, MEIS (Merchandise Exports from India Scheme) and the ROSCTL (Rebate of State and central taxes and levies) schemes.

If the current trends of declining exports continue into the next quarter, it will lead to closure of several spinning units in the near future, resulting in layoffs, he said.

Appeal to govt

Texprocil has appealed to the government to include cotton yarn in the interest subvention scheme and also rebate the embedded taxes such as agricultural cess, mandi tax, power and fuel surcharge which incurred in the production process.

The ROSCTL scheme which rebates these levies should be extended to cotton yarn sector at the earliest, it said. This move will ensure that the industry exports only products and not the taxes, it added.