Cotton Textiles Export Promotion Council’s (Texprocil) chairman Ujwal Lahoti has said that India’s share in exports of cotton yarn has dipped to around 26% in 2017 from 30% in 2015, despite being the largest exporter, due to various reasons, including withdrawal of incentives. He added that exports have stagnated in the last two years, whereas Vietnam has become the second largest cotton yarn exporters in the world with a marketshare of 20% in 2017. He also said that if the tariff is corrected, the country’s exports will get a boost.
Lahoti attributed the dip to the absence of a level-playing field, high transaction cost and lower rate of export benefits. He added that the fall in demand was mostly because of China. He said China was shifting its yarn production to Vietnam, which has become a conversion centre for Chinese cotton, following rise in labour cost.
India exported 603 million kg of cotton yarn to China in 2013-14, which fell by half to 315 million kg in 2017-18, while Vietnam's exports to China increased from 287 million kg to 718 million kg during the period. China is importing from India only to bridge the gap in demand from supplies from its domestic spinners and imports from Vietnam.
Stating that Indian cotton yarn attracted 3% to 5% import duty in China, supplies from Vietnam did not attract any such tariff, Lahoti urged the union commerce ministry to get zero duty benefits for Indian cotton yarn by initiating talks through fora such as APTA (Asia-Pacific Trade Agreement) and RCEP (Regional Comprehensive Economic Partnership).
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