June 20, 2018
COIMBATORE: Despite being the largest exporters of cotton yarn, India’s share has dipped to 26 per cent in 2017 from 30 per cent in 2015, due to various reasons, including withdrawal of incentives, Chairman, Cotton Textiles Export Promotion Council (Texprocil), Ujwal Lahoti said on Wednesday.
“Exports from India have stagnated in the last two years, whereas Vietnam has become the second largest cotton yarn exporters in the world with a market share of 20 per cent in 2017,” Lahoti told reporters here. Attributing the absence of a level playing field, high transaction cost and lower rate of export benefits to the curtailment of the export competitiveness of the Indian textile industry, he said that fall in demand in China was also a major reason for this.
“China has shifted its yarn production to Vietnam, which has become a conversion centre for Chinese cotton, following increase in the labour cost,” he said.
India exported 603 million kg of cotton yarn to China in 2013-14, which almost fell half to 315 million kg in 2017-18, while Vietnam’s exports to China increased from 287 million kg to 718 million during the period, he pointed out.
China is importing from India only to bridge the gap in demand from supplies from its domestic spinners and import from Vietnam, he claimed.
However the drop in exports to China was to some extent compensated by the increase in exports to Bangladesh, Turkey, Portugal, Pakistan and Egypt, he said. Stating that Indian cotton yarn attracted 3.5 per cent to five per cent import duty in China, supplies from Vietnam did not attract any such tariff, Lahoti urged the Commerce Ministry to get zero duty benefits for Indian cotton yarn by initiating talks through forums such as Asia-Pacific Trade Agreement and Regional Comprehensive Economic Partnership). “If the tariff is corrected, our exports will get a boost,” Lahoti said.