Govt should take immediate action on the spike of cotton yarn prices: AEPC

The Apparel Export Promotion Council (AEPC) on Wednesday urged the government to take immediate measures amid a spike in raw material prices to protect the competitiveness of Indian apparel exports in the global market.    

The price of cotton yarn has increased by 10% in the last two months. The price increased from Rs376/kg in March to Rs406/kg in April and further to Rs446/kg in May. In the last 18 months, this hike in the prices of the yarn has been to the tune of about 100%, rising from Rs200 /kg to Rs446/kg.   

Maintaining the competitiveness of Indian exports was pertinent to ensure meeting the ready-made garments export target of $20 billion for the year 2022-23. 

AEPC chairman Narendra Goenka said that while the industry was making efforts to increase its production capacity, the continuous increase in the cost of raw materials has impacted the entire apparel value chain, leading to an increase in the garment price.

“The apparel exporters have been facing a lot of resistance by the buyers towards placing new orders due to this continuous increase," said Goenka.      

He added that while India was already losing out to its competitors in Bangladesh, due to their free trade agreements in markets like the EU, the prevailing high prices will only result in increasing the competitiveness gap of India viz-a-viz its competing countries. “It will divert global orders to our competing countries, along with the associated jobs and domestic value addition potential," said Goenka.    

The government last month waived the customs duty on cotton imports from April to September this year to cool prices. “While it was expected that this reduction in import duty will benefit the textile industry and keep prices low for cotton and subsequently cotton yarn for the apparel industry, however, that has not helped in cooling the prices," said Goenka.

 “With your timely and stern intervention on controlling the ever-rising yarn price, will help us to achieve the export target close to USD 20bn and doubling exports by 2027," he added.