Export Restriction Eased on Yarn Made from Imported Cotton
Indian officials seek to balance the needs of yarn exporters with the interests of the domestic textile industry, which is pushing for a lifting of the restrictions on all types of yarn.
January 27, 2011
In a statement made on Jan. 24, India’s Director General of Foreign Trade has lifted the restriction on cotton yarn exports for yarns made exclusively from imported cottons.
The Central Excise Authority of India must certify that the cotton yarns are made from imported cotton only before Customs will allow exports. This policy strives to balance the interests of the weaving, knitting and spinning sectors and supports the spinning industry’s request for unrestricted yarn exports … to some certain extent.
The spinning industry has recently invested huge amounts of capital to increase its capacity, so the utilization of that new capacity is important for the industry’s viability. Equally important, the government wants to support the interests of the many textile workers in its domestic powerloom and knitting industries--and the availability of cotton yarns to the domestic weaving and knitting sectors is critical to sustain those jobs.
Although the Director General of Foreign Trade approved the export of yarns made from imported cotton on January 24th, the Central Board of Excise and Customs has not yet been charged with implementing the new policy, according to a spinning industry source. The Indian spinning industry has welcomed this decision and is requesting that the Indian government remove export restrictions on other categories of yarn as well.