Cotton textile exports plunged 53 per cent last month to $758 million, against the $1.62 billion logged in May 2019, while apparel exports fell 66 per cent to $1.27 billion ($3.15 billion) as economies across the globe reeled under the pandemic.
Cotton yarn and fabrics exports slipped 47 per cent to $465 million ($885 million) in May while readymade garment shipments dropped 66 per cent to $517 million ($1.53 billion).
Similarly, textile export in the first two months of this fiscal decreased 68 per cent to $991 million ($3.13 billion) and that of apparel was down 78 per cent to $643 million ($2.94 billion), according to data released by the Ministry of Commerce and Industry.
The falling cotton textile exports is a matter of deep concern with consistent decline in cotton yarn shipments in consecutive months, which has adversely affected the cotton spinning sector, said KV Srinivasan, Chairman, Cotton Textiles Export Promotion Council (Texprocil).
Buyers in the US and EU — the two leading export destinations for India — are cancelling orders and many of them are increasingly invoking force majeure clauses within their contracts to halt payments.
On the other hand, he said, buyers of cotton yarn are insisting on a sharp price cut of 15-20 per cent, adding to the problems of the cotton spinning sector.
Plea to government
Since exporters are passing through unprecedented times, Srinivasan urged the government to include cotton yarn under the 3 per cent Interest Equalisation Scheme. He also requested the government to cover cotton yarn and cotton fabrics under the present RoSCTL (Rebate of State and Central Taxes and Levies) Scheme and the much-awaited Refund of Duties and Taxes on Export Products (RoDTEP) Scheme.
These schemes, he pointed out, reimburse all the duties and taxes incurred during the production process and support the maxim of “export of goods and not taxes”. It would also enhance the overall competitiveness of the textile industry and give a fillip to India becoming a hub of fabric and yarn production to serve both the domestic and export markets.
Texprocil also urged the government to release all the pending claims under ROSL and RoSCTL to exporters of made-ups and garments.
All these measures will help exporters of cotton textiles sustain exports, which in turn enable consumption of cotton which has been procured and stocked by the Cotton Corporation of India in very large quantities, said Srinivasan.