JOIN USCotton textile exports decline 16% in FY20
Cotton textiles exports have declined 16 per cent to $9.4 billion during the first 11 months of 2019-20 as compared to $11.2 billion in the same period of previous year. The decline was on account of COVID-19 pandemic in China and lockdowns that impacted exports to China during the last quarter of the fiscal.
"The fall in exports of cotton textiles is a matter of deep concern. Within the basket of products, there has been a steep decline in exports of cotton yarn by (-) 28.45 per cent during this period," K V Srinivasan, Chairman of The Cotton Export Promotion Council (TEXPROCIL) said.
Exports of cotton yarn reached $2.5 billion in April-February 2019-20 as compared to $3.5 billion during the same period last year. Sharp declines were reported in major export markets like China (-51%), Bangladesh (-23%), Vietnam (-18.5%) and South Korea (-28.46%). There has been a consistent decline in exports of cotton yarn in almost all the months during April-February of 2019-20, which has adversely affected the cotton spinning sector, Srinivasan pointed out.
On the other hand, the growth in exports of cotton fabrics and made-ups has also been marginal at 3.05 per cent.
Export of cotton textiles during March to May 2020 would be very low and insignificant on account of the outbreak of COVID-19 which had led to forced lockdowns in China and other leading markets in the world, he said.
The quick estimates of exports for the month of May released on Monday by the Ministry of Commerce points to a steep decline of (-) 64.55 per cent in exports of cotton textiles including cotton yarn during the two months’ period of April-May, said Srinivasan.
The Chairman further pointed out that buyers in the US and EU, two top destinations for exports, are cancelling orders and many of them are increasingly invoking ‘force majeure’ clauses within their contracts to halt payments. Buyers of Cotton Yarn are insisting upon a steep price cut by 15 to 20 per cent adding to the problems of the cotton spinning sector.
He urged the Government to include Cotton Yarn under the 3 per cent Interest Equalisation Scheme. He also requested the Government to cover Cotton Yarn and Cotton Fabrics under the present Rebate of State and Central Taxes and Levies (RoSCTL) Scheme and the much-awaited Refund of Duties and Taxes on Export Products (RoDTEP) Scheme.