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The Southern India Mills’ Association

Committed to Foster the Growth of the Textile Industry

Reduce duty to improve cotton yarn export to China’

‘The Cotton Textiles Export Promotion Council (Texporcil) is expecting a correction in the duty tariff on the export of cotton yarn from the country to China which was reduced from 603 million kg in 2013-14 to 315 million kg in 2017-18.
Texprocil chairman Ujwal Lahoti said here on Wednesday that Vietnam emerged as a major competitor for India in terms of the export of cotton yarn to China, the largest importer, taking advantage of duty free access to the country.
Though cotton yarn exported from India was superior in quality, the export reduced due to duty tariff of 3.5 % to 5%, he said.
“Texprocil is taking efforts to bring down the duty tariff. We have already represented the issue to forums like Asia Pacific Trade Agreement and Regional Comprehensive Economic Partnership (RCEP) and the Union Ministry.
“They have assured us positive changes in the tariff. India will get an upper hand over Vietnam only if the duty issue is addressed,” said Mr. Lahoti.
According to Mr. Lahoti, a major chunk of mills from China shifted to Vietnam in the last five years, making it a conversion centre. Yarn produced in Vietnam thereby enters China without duty tariff, he said.
Vietnam, which had exported 287 million kg of cotton yarn to China during 2013-14, bettered its position and overtook India during 2017-18 by exporting 718 million kg. Currently, Vietnam’s export is 228 % of India’s export to China. Though India remains the largest exporter of cotton yarn in the world, the country’s share declined to 25% in 2017 from 30 % in 2015. Meanwhile, cotton yarn export from Vietnam, the second largest exporter with 19.94% share in the global market, increased to 881 million kg in 2017-18 from 250 million kg in 2012-13, registering a growth rate of 252 %.
Mr. Lahoti said various issues of refunding related to embedded taxes, as in the form of duty for electricity and petroleum products used in the cotton textile value chain, need to be addressed if exports had to pick up.