Government of India has lifted the restriction on cotton yarn exports effective April 1, 2011.

In a notification dated March 31st, Director General of Foreign Trade of India advised the removal of restrictions on cotton yarn exports effective April 1st for the fiscal year 2011-12. According to the revised regulation, cotton yarns other than sewing threads not put up for retail sale are now listed under “free list.” The contracts for cotton yarn exports should be only registered with Directorate General of Foreign Trade and shipment can go ahead against the verification by the Indian customs.

Previously, cotton yarn exports were under license category with a maximum limit of 720 million kgs for the 2010-11 fiscal year, ending on March 31st, 2011.

In speaking to this scribe on April 4th from India, Dr. Selvaraju, Secretary General of the Coimbatore based The Southern India Mills’ Association which has over 400 spinning mills as its members said, “India can export up to 1200 million kgs of yarns as the domestic demand has shrunk.” As the upstream processing industry in Tirupur has shrunk by 30%, spinning mills’ production capacity can easily meet the domestic demand, he said. Dr. Selvaraju further stated that the Ministry of Textiles may ask for export restriction of 845 million kgs of cotton yarn later this year.

However, the latest export policy for cotton yarns has not been received well by the Tirupur Exporters Association, which represents the knitters and readymade garment exporters.