KOLKATA: The Indian cotton yarn industry is in a spot. The recently announced Chinese cotton policy has made cotton yarn exports to the Dragon country unattractive thus denting Indian yarn exports by 25% in the month of April.

Though the demand of cotton yarn in domestic market is showing some recovery but the textile mills say that the robust growth is yet to be felt thus raising concern for the industry which has just come out from the financial hardship of 2009-10.

Talking to ET, SP Oswal, chairman and managing director, Vardhaman Group said, "Last year the average exports was around 120 million kg. This was largely driven by Chinese demand. But this April yarn exports has come down to 90 million kg. Chinese cotton policy is one of the major reasons for a drop in cotton yarn exports from the country." China accounts for nearly 50% of the yarn exports from India.