Industry writes to minister over hike in yarn prices

Tribune News Service
Ludhiana, January 8

The Ludhiana Textile and Hosiery Industry is worried over the ever-increasing prices of yarn in recent times. Industrialists have submitted a representation to Textile Minister Smriti Irani to intervene to save the garment and knitwear industry.

Ajit Lakra, Head, Textile Division, FICO, said the industry has come on the verge of closure. The fabric and garment industries are predominantly, in the MSME segment and are labour-intensive, employing lakhs of workers. There is a constant undue increase in the prices of all the basic raw materials, such as all types of yarns such as cotton, polyester, poly cotton and spandex yarn, packing materials such as poly bags, paper, cardboard, plastic and all kinds of inputs.

Cotton yarn

The cotton of the country this year was higher than last year. Moreover, garments exports to Europe and the USA are less than half compared to last year. In spite of that there was a shortage of yarns and price increase is most unreasonable (about 50%), in the last 3-4 months, going beyond the reach of the MSME units. This is because the basic cotton yarns are being exported to Bangladesh and China in large quantities by local spinners and for Indian market they have made a cartel along with the traders to increase the prices and have created an artificial shortage to increase the rates to make more profits, rendering the MSME industry unviable and uncompetitive in the domestic as well as export market. The government should ban/disincentive the export of yarn or fix a quota of export of cotton yarn, so that cotton yarn can be made available for domestic manufacturers at a reasonable price.

Polyester yarn

The government should immediately remove anti-dumping duty on polyester yarn and its raw materials so that yarn becomes available to the Indian textile manufacturers at the international price through import.

Spandex yarn

The government should remove the anti-dumping duty on import to stabilise the rates at reasonable levels. The MSME textile units are already under a heavy stress, the abnormal rise in yarn prices have further made the survival of the MSME units very difficult. The closure of the MSME garment units would render lakhs of workers unemployed and will cause a big setback towards the country becoming Atmanirbhar Bharat in textiles. To save the MSMEs, the government should take immediate necessary steps to promote local manufacturing of fabrics, garments and value addition in fabrics rather than exporting yarns, majorly to China who has a malicious intent to make the country unviable and uncompetitive in the domestic and international market.

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