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Monday, 2 September 2019

Indian cotton exports continue to slump!

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It’s not a good time for cotton textiles in India!

The April to July 2019 period saw the export of cotton textiles slump by a striking 24.5 per cent. And it’s just getting worse.

The provisional data for the first 3 weeks of August 2019 shows that the 25 per cent fall in exports is continuing month-on-month basis.

Expressing concern, Dr. K.V. Srinivasan, Chairman, The Cotton Textiles Export Promotion Council (Texprocil) said in a statement “A commodity-wise analysis of the data shows that while garment and made-up exports have shown a positive growth, exports of cotton yarn/fabrics are showing a declining trend.”

He added that a sharp and precipitous decline especially of cotton yarn during the last 4 months by about 35 per cent has led to a crisis situation in the spinning industry.

In fact, the monthly exports of cotton yarn are at a 5-year-low of 59 to 60 million kgs. That’s something really worrying!

Exports to major markets like China have declined by 50 per cent and Bangladesh by 38 per cent and Korea by 45 per cent.

Dr. Srinivisan said that made-ups and garment exports are recording positive growth mainly on account of the extension of the ROSCTL which rebates all types of State and Central taxes. This measure has not only ensured that taxes are not exported by the garment and made-up sector but also enabled them to regain competitiveness.

In view of this, he has urged the Government to also cover the exports of cotton yarn and fabrics in the ROSCTL schemes and refund the State and Central taxes. These taxes are in the range of 6 to 7 per cent of the value and will go a long way in mitigating the serious situation in the spinning and weaving sector.

He also added that several competing countries are gaining access in various export markets like China, South Korea and Turkey mainly on account of the preferential access given to them by the importing countries leading to further erosion of India’s market share.

Dr. Srinivasan pointed out that while Vietnam has increased its exports of cotton yarn to China by 17 per cent during the last 4 months, India’s share has gone down by 16 per cent during the same period.

In view of the sharp decline in exports, he stated that the sector is in a very critical situation as many production units are closing down and need urgent policy support. He also requested the Government to extend the 3 per cent Interest Equalisation to cotton yarn.

These measures will help the cotton yarn sector and the spinning industry at large to minimise their losses and regain their competitiveness.

Source: https://in.apparelresources.com

    
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