India’s exports of cotton textiles fell 24 per cent during April to July, 2019. This has led to a crisis-like situation in spinning industry. In fact, monthly exports of cotton yarn are at a five-year-low. Exports to major markets such as China have halved, and exports to Bangladesh and Korea have fallen 38 per cent and 45 per cent.

Competing countries are gaining access to various markets such as China, South Korea and Turkey, mainly on account of the preferential access given to them by the importing countries, leading to a further erosion of India’s market share. While Vietnam has increased cotton yarn exports to China by 17 per cent during the last four months, India’s share declined 16 per cent in the same period. In view of the sharp decline, many production units are shutting down and need urgent policy support. The industry wants the three per cent interest equalisation to be extended to cotton yarn since this is expected to help the cotton yarn sector and the spinning industry to minimise their losses and regain their competitiveness.

However, made-ups and garment exports are recording a positive growth mainly on account of the Rebate of State and Central Taxes and Levies scheme.