Export of Cotton Commodities

The Government has taken the following steps to boost the export of textiles, including cotton commodities –

  • Announcement of a special Textile Package for garments and made-ups sector.
  • MEIS Scheme under new Foreign Trade Policy 2015-20.
  • Restoring Interest rate subvention for pre and post shipment credit for the textile sector.
  • Increased Duty Drawback rates for some textile articles.
  • Market Access Initiative (MAI) Scheme.
  • Market Development Assistance (MDA) Scheme.
  • Duty-free import of trimmings, embellishments and other specified items under Export Performance Certificate Entitlement Scheme.

Apart from this, the Government has taken following initiatives specifically for cotton sector

Export Policy of Cotton: The Export of Cotton at present is under Open General License. The Directorate General of Foreign Trade, Ministry of Commerce and Industry being the facilitator for the Import and Export of Cotton has dispensed with the registration requirement for Export of Cotton.

Export Policy of Cotton Yarn : The present policy for export of cotton yarn is “Free” i.e. export of cotton yarn has been permitted under Open General License. Further, the Directorate General of Foreign Trade, Ministry of Commerce and Industry has dispensed with the registration requirement for export of cotton yarn.

Despite a robust demand from Bangladesh, overall cotton yarn exports remained under pressure during the current financial year due to sluggish demand from China.

For the April–December 2016, India’s cotton yarn exports slumped by 12 per cent to 872.19 million kgs from 987.21 million kgs in the corresponding period last year. Cotton yarn exports from India rose by a marginal 4.29 per cent at 1307.11 million kgs for the financial year 2015-16 from 1253.33 million kgs for the previous year.India faces direct competition from Vietnam as China has allows zero duty import from there. So, instead of cotton, Chinese textiles mills would move to purchase cotton yarn from India.

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