India Industry Association Appeals To The Government To Incorporate Cotton Yarn Into Interest Subsidy Scheme

The cotton yarn industry has always been one of the pillars of India's textile industry, and also a highly modern and technology driven industry. From April 2019 to June, the export volume of India's cotton yarn decreased from 338 thousand tons in the same period last year to 226 thousand tons, down 33% compared to the same period last year.

In the months to come, the export volume of India's cotton yarn decreased from 90 thousand tons to 77 thousand tons in 4-6 months, and then reduced to 59 thousand tons. The 59 thousand tonnes in June were the lowest in the past 5 years. The cotton yarn industry has always been one of the pillars of India's textile industry. It is also highly modern and technology driven, and also provides sustainable income for farmers. There are many reasons for this sharp decline, including the decline in exports of major export markets such as China, Bangladesh and South Korea, as well as the exemption of imports of cotton yarn from Pakistan and Vietnam to China from April 1, 2019.

India industry said that exports were the only way to ensure continuous production and capacity utilization, taking into account the large scale investment in the textile industry and the weak domestic market demand. Although cotton yarn is a value-added product, it is excluded from export benefits such as interest subsidies, MEIS and ROSCTL programs. In view of the above, the India Industry Association appealed to the government to incorporate cotton yarn into interest subsidy scheme and withdraw taxes and charges generated in the production process. If the downward trend of export continues next quarter, it will lead to closure of the cotton mill.