The US ban on textiles originating from the Xinjiang province of China has compounded the problems for India's cotton yarn spinning industry.

The Chinese yarn that can't go to the US is now finding its way into the Indian market at cheaper rates, further reducing the demand for domestic cotton yarn that has already been down.

So the domestic industry has been affected adversely.Most mills have either shut down their spindles or have gone for making substitute fibers like viscose, polyester etc.

India's yarn exports in August 2022 fell to less than one-third of the normal monthly yarn exports. Export orders for Indian yarn, textile, garments, etc. are very low, while Indian domestic cotton and yarn prices are still higher by 23 per cent than New York futures prices.

The entire spinning industry is depressed. Exports have fallen by 70 per cent. Indian yarn exported to China and Bangladesh gets converted into fabric and garments and then gets exported to Europe and the US. A fall in garment imports by Europe and the US due to recessionary pressures, in turn, has already cut the demand for Indian yarn from China and Bangladesh. The impact due to the US ban on fabrics from Xinjiang has added to that.