Exports of India’s cotton yarn fell 11.58 per cent in value terms and 4.44 per cent in terms of volume in the April -June period this year compared to the same period last year. Exports to China, the main buyer of Indian cotton yarn too has declined.

China imported 149.66 million kg of cotton yarn in the first three months of last financial year (2015-2016) and it dropped to 99.09 million kg during the same period this year. The decline in exports started in April 2014. Then the total cotton yarn exports from India used to be 140 million kg a month that has dropped to about 100 million kg now, informed M Senthil Kumar, Chairman of Southern India Mills’ Association.

With a drop in demand in the domestic and export markets, capacity utilisation in textile mills has also gone down. With existing capacity, India can produce up to 500 million kg of yarn a month. However, production is only about 470 million kg now. Bangladesh is the second largest buyer of cotton yarn from India. Exports to Dhaka went up by 38.87 per cent in value between April and June this year and 52.1 per cent in terms of volume during the same period. This year, India’s exports to Pakistan improved in terms of value and volume.

Competitiveness of Indian cotton yarn in the international market should improve. Further, fluctuations in cotton price have hit the textile mills, Kumar said. The government should give two per cent under the Merchandise Export Incentivisation Scheme and three per cent under the interest equalisation scheme for one year. This will help India increase export to other countries too, Kumar summed up.