India: Export Restrictions

During 5th Asian Textile Conference organized by the Confederation of Indian Textile Industry, EU Commission Delegation and Euratex had meetings with the Joint Secretary of the Ministry of Textiles (responsible for the measures adoption) and with DGFT-Directorate General of Foreign Trade from the Ministry of Commerce (responsible for the measures implementation


Main points of the discussions:


Indian Government

– Indian Government (Ministry of Textiles) will take a decision in the coming days regarding Cotton Yarn Export

Restrictions. The new legal framework will enter into force the 1rst of April coinciding with the new fiscal

year. Regarding Cotton the situation will remain unchanged until the next season.

– Euratex and the Commission insisted on the urgent need to withdraw all the restrictive measures as they

were creating enormous problems in the market- availability and huge price increases. These measures are

harmful not only for EU Industry but also for Indian Producers unable to sell the products. In the medium term

India would loose its customers that will look for alternative sources of supply.

– The Indian Government recognized that the measures were creating a difficult situation in the market and that

complaints were being received from all major trading partners (EU, Pakistan, USA, Bangladesh, Turkey) but

also from the Indian Textile Industry.

– The government said that our point of view would be taken into consideration in their decisions but also the

views from small Indian Weavers and Garment manufacturers who were concerned about the availability of

yarn for their consumption.


Indian Industry

– The Textile Industry is against the Restrictions on Cotton Yarns and they are asking the Indian Government to

withdraw the measure. This was clearly stated in the public presentations made in the Conference by the

representatives of the main Textile Associations

– Indian companies are facing a stock increase problem due to the impossibility to export the yarn they have


– Indian Textile Industry is asking for an export quota between 1,2-1,5 million tonnes of yarn for 2011-2012

(this season the limit was 0,72 million tonnes).


What to expect:

In the coming days the Indian Government will decide on the Yarn Export Restrictions- to enter into force the 1rst of April. In principle and contrary to what UE would like the Restrictions will remain in place. We can expect an increase in the Export Quota but the question remains how much. Apparently the Government was inclined for 0,845 million tonnes but the Industry is requesting an export quota between 1,2-1,5 million tonnes.

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