The recent export ceiling imposed on yarn manufacturers has been lifted, subject to some conditions, on makers of value-added speciality yarn and technical yarn.
In another relief for one category, exports of cotton yarn made from imported cotton will not need a certificate from the excise authority if the imports were done on or after October 1, 2010. Certification from the Directorate General of Foreign Trade (DGFT) would suffice.
The government had, around three months earlier, imposed an export ceiling of 720 million kg on cumulative cotton yarn exports for the current financial year, ending March 31. It did so at the urging of garment makers, who were apprehensive on yarn pricing and availability.
The relaxation referred to earlier came around a week before, in a circular issued by the ministry of commerce. DGFT has exempted all export-oriented units and textile units engaged in manufacturing value-added speciality yarn and technical yarn from the ceiling, as long as they can show they’d been exporting for the past two years.
The total production of speciality and technical yarn is about 50-60 million kg yearly, a small proportion of the 3,600 million kg of yarn of all kinds produced in India. But this manufacture is predominantly export-oriented.
S P Oswal, chairman of the Oswal Spinning and Weaving Mills, a company with a prominent share in speciality and technical yarn, said the export cap had rendered capacities idle. ‘Domestic demand is miniscule, so there is thorough dependence on the export market,” he said.
The government just understand, he added, that intermittent suppliers cannot sustain in the global market. D K Nair, secretary-general, Confederation of Indian Textile Industry, said there was lack of clarity on the parameters of value-added speciality and technical yarn. This is being set right and exports should commence in a week to 10 days.
