Page 25 - January-February-2019

Indian cotton fabric and yarn
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exports fall due to high duties

Due to a duty disadvantage India is lagging in spinning mills performed well in exports in
cotton exports to major markets in regards to 2013-14, when cotton yarn was covered under
Bangladesh, Pakistan and Vietnam. Indian schemes such as 2% incremental export
cotton yarn export to the likes of EU and incentive, 2% interest subvention and 3%
China slumped 25pc in the last 5 years, whilst focus market incentive. The sector could
fabric export decreased to 7pc. penetrate markets other than China. The fall in
cotton yarn and fabric exports is impacting the
According to the Apex Chamber of Indian entire value chain — from farmers to spinners,
Textiles, the exports of Indian cotton yarn weavers and knitters. There is considerable
exports decreased to $3.4 billion in 2017-18, exportable surplus but we are not able to be
from $4.5 billion in 2013-14. The largest cotton overcome the tariff disadvantage despite being
yarn importer, China has replaced India with competitive in both spinning and weaving.”
Indonesia and Vietnam because of their duty
free access while the exported Indian yarn However, withdrawal of these incentives left
carries a duty of 3.5pc. Similarly, Indian the mills high and dry. The industry, said Jain,
exports of cotton yarn are subject to a 4% is forced to sell cotton yarn at lower prices
duty in the EU, while Vietnam and Indonesia due to a surplus. In case of fabric, Indian
have a 3.2% tariff and least developed exports are levied 8-10% duties, which is 6.4%
countries (LDCs) get duty-free access. maximum for other exporting countries.

CITI has suggested inclusion of cotton yarn According to the CITI analysis report, instead
and higher incentive for fabric — from the of being converted to yarn or fabric India’s raw
current 2% —in the Merchandise Exports from cotton is going to various markets at 0 duty
India Scheme, to make them competitive. resulting in loss of foreign exchange as well
as employment. India exported $1.9 billion of
Mr Sanjay K Jain, chairman, CITI said, “Indian raw cotton in 2017-18.

Pak Govt urged to fight anti-textile

sector 'propaganda'

PHMA (Pakistan Hosiery Manufacturers Association), Following a Human Rights Watch report that
alleged violation of labor laws in Pakistan’s textile sector recently urged the govt. to direct its missions
and embassies abroad to counter the ‘propaganda’ against Pakistan’s textile industry, which
constitutes more than sixty pc of total exports.

Mr Adil Butt, PHMA chairman said that by the European Union (GSP Plus) generalized system of
preferences plus status was conditional upon Pakistan to ensure ratification and compliance of 27
international conventions on human and labor rights, governance and environment; including eight
core labor standards of the International Labor Organization (ILO).

PHMA feels that Pakistan’s factories follow labor laws, global standards and had no child labor and
zero discrimination against women.

January/February 2019