Though the industry is facing oversupply situation at the moment, Indian spinners are focusing on building capacities expecting pick-up in demand from both the domestic and export markets for cotton yarn. Currently, it has an overall installed capacity of 50 million spindles, to which 10-15 per cent more is expected to be added in the next one year. Of the the yarn spinning capacity of 50 million spindles, about 45 million are functional. Capacity utilization is estimated at 75 per cent, due to oversupply.

In an analysis on the yarn industry, the Center for Monitoring Indian Economy said, “We expect the growth in yarn production to increase in 2015-16 by 4.8 per cent to 4.3 million tonnes.” The capacity addition will majorly take places in the states of Gujarat, Maharashtra and Telangana.

While the industry bodies like Texprocil were asking government to direct Cotton Corporation of India (CCI) to release of almost 50,000 cotton bales a day to bring down shortage in the domestic market, the CCI Chairman BK Mishra has said that the shortage claimed that there is no shortage of cotton bales in the domestic market. “That the market is facing a shortage of cotton is a misnomer. While India is expecting a bumper harvest of 40 million bales in the current year through September, as estimated by the Cotton Advisory Board, exports have crashed due to a slowdown in top buyer China, so there is ample cotton available in the domestic market,” Mishra said. Cotcorp.gov.in