Apparel Industry Seeks Govt. Support To Yarn Exports

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Garments Exporters Association (GEA) President Rakesh Vaid, has expressed concern over the sharp rise in prices of cotton and yarn which is severely affecting the performance of Indian apparel industry

That apart, price fluctuation, and fabric availability have become a serious issue as weaving units are not respecting delivery commitments.

The apparel industry has also sought some kind of control on exports of cotton and yarn and emphasized on the need to focus more on value added exports of garments rather than raw cotton or yarn, as the value addition is six times.

The prices of yarn are rising given the rising exports of cotton to the western countries. Indian cotton exported are of excellent quality. It is then manufactured in the western countries and again exported to India, which is giving Indian apparel manufacturers a tough time.

Vaid informed that he had already informed the government to ban cotton exports or put an end to high quality exports from going to western countries. In fact the government has been requested to impose high duty which ...
... could help deter exports of cotton from India. However, the government has to yet to act on this.

There is massive demand for cotton yarn in the country. If under such these conditions yarn is exported out of the country then finished garment manufacturers will come under tremendous stress.

He also informed that cotton yarn which is exported from India are manufactured in the developed countries which is then sold back to India and other countries giving a stiff competition to India on the export front.

The manufacturers are not interested in increasing the prices of the finished products as the possibility of loosing buyers is quite high in this case. However, the situation can only be controlled by placing prohibitions in export of yarn and cotton from India, or else the country should be ready to lose its market share in the future. We cannot simply add to the prices because it will make the sector uncompetitive.

Indian garment exporters are yet to recover from the recession and low unit value realization from the export market and it would really take some more time for the world economy and the apparel trade to revive.

Vaid further pointed out being a labor-intensive garment export sector calls for special consideration because it adds maximum value to the exported products using over 95 percent indigenous materials.

Industry sources suggest that with the increase in prices by apparel manufacturers currently, the retailers are planning to pass on the costs to the consumers.

In the last few months, fabric prices have climbed up by 5-10 percent. Cotton pries have scaled up by 30 percent and yarn prices have also shown an upward climb, from 139 per kg in August to Rs.170 kg at present.

Meanwhile the prices of cotton prices are peaking in the country, 40 lakh bales are already exported during the first five months of this season.

Cotton production in the country is also expected to rise this season from 295 lakh bales to 290 lakh bales.

The Apparel Exports Promotion Council (AEPC) has also sought the help of textile ministry to cut the exports of cotton and yarn and thereby minimize the rising fabric prices on the domestic apparel industry.

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