33% fall in cotton yarn exports from India! Worrying signs for the industry, says Texprocil Chairman

The cotton yarn exports from India declined to 226 million kg during April to June 2019, with a steep downfall of 33 per cent from what it was in the corresponding period of the previous year. In April to June 2018 period, the export of cotton yarn was 338 million kg (see the below table).

This was confirmed today (31 July) by Dr K.V. Srinivasan, Chairman, Texprocil in a statement.

What is more worrying is the month-on-month decline. While it was 90 million kg in April 2019, it fell to 77 million kg in May 2019. It further dipped to 59 million kg in June.

The significant drop (59 million kg) in the month of June is the lowest monthly export in last 5 years.

So what’s causing this worrying decline! There’s been decline in exports to major export markets like China, Bangladesh and South Korea. Also, duty-free access given for import of cotton yarn by China to Vietnam and Pakistan from 1 April 2019 is another cause of this slump.

Srinivasan said that even though cotton yarn is a value-added product, it has been excluded from export benefits like interest subvention, MEIS and the ROSCTL schemes.

Substantiating on the same, he urged the Government to include cotton yarn in the interest subvention scheme and also rebate the embedded taxes like Agricultural Cess, Mandi Tax, Power and Fuel Surcharge which incurred in the production process.

He further added that the ROSCTL scheme, which rebates these levies should be extended to cotton yarn sector at the earliest.

The Chairman said that doing so will not only ensure products are exported (and not taxes) but also provide the much needed impetus in the context of rising cotton prices and appreciating rupee, which are eroding competitiveness.

He also said if the exports continued to decline in next quarter as well, many spinning units may shut down, resulting in layoffs.