India's cotton yarn export quota is reduced to 720,000 tons

According to recent reports from international media, the Indian government has recently reduced the cotton yarn export quota to 720,000 tons in an effort to safeguard the interests of domestic textile workers. The Indian Textile Commission revealed that during the fiscal year 2010–2011 (April 2010 to March 2011), the country’s total cotton yarn supply is expected to reach 3.46 million tons, with domestic consumption (excluding exports) estimated at 2.656 million tons. Exports are projected to be around 720,000 tons, marking the highest export limit in three years. Previously, the government had set a cap of 935,000 tons for raw cotton exports. The unusual dynamics in India’s cotton and textile markets have drawn significant attention from the government. To ensure sufficient domestic supply of raw materials, authorities have implemented staged export quotas across various sectors, including cotton, yarn, spinning machines, power looms, handlooms, printing and dyeing units, and finishing equipment. In September 2010, the government established the Cotton Yarn Advisory Committee to monitor and regulate the nation's cotton yarn stocks. Since its formation, the committee has met twice and finalized the export quota policy for the 2010–2011 period. The textile industry plays a vital role in India’s economy, particularly in Tamil Nadu, where it serves as a major economic pillar. With over 3,200 spinning mills nationwide, 60% of them are located in Tamil Nadu. Unlike developed nations such as the United States, Indian textile mills continue to expand their operations in key yarn production hubs. This growing demand has led to increased government scrutiny and intervention in the cotton and yarn sector. Recently, the Chief Minister of Tamil Nadu wrote to the Prime Minister urging the immediate suspension of cotton exports until domestic needs are fully met. He also called for restrictions on cotton yarn exports and an increase in cotton export taxes. Meanwhile, Indian textile mills are under pressure due to a large backlog of orders. As of now, the industry has secured export contracts totaling 779,000 tons, with 458,000 tons already fulfilled. The Indian Textile Association has urged the government to allow further exports to meet contractual obligations. According to the export management department, cotton yarn exports can be processed within 45 days of registration, meaning that mills will need to complete the remaining 221,000 tons by mid-January 2011. Industry experts warn that in the coming months, Indian spinning mills will face intense pressure to operate at maximum capacity, dealing with high production loads and challenging market conditions.