India’s cotton yarn exports slumped 44 per cent in July 2019 compared to July 2018. The downward trend continued in the first week of August as well. Between April and July, cotton yarn exports fell nearly 35 per cent. Exports to China, Korea and Bangladesh are down. However, competing countries are increasing their share in exports to markets such as China, South Korea, and Turkey.

While India was the second largest exporter of textile and clothing in 2014-2017, it has come down to fifth position now. The space vacated by China in textile and clothing products has been largely consumed by Bangladesh, Vietnam, Pakistan and other least developed countries. While Indian yarn incurs 3.5 per cent to four per cent duty in China, the levy is nil for yarn exported to China from Vietnam, Bangladesh and Pakistan. India is now seen as a gap-filling segment and not as the main feeder. It is mainly because of tariffs.

The industry wants the three per cent interest equalisation to be extended to cotton yarn. Also the rebate of state and central taxes and levies scheme for garments should be extended to yarn and fabrics too. Further, it wants the raw materials for manmade fiber and viscose yarn to be available at international prices so that more spindles convert to synthetic yarn.