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 total supply of cotton yarn in India 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 level of cotton yarn exports in three years. Previously, the government had set a limit of 935,000 tons for raw cotton exports. In recent months, the unusual dynamics in India’s cotton and textile markets have drawn significant attention from the government. To ensure sufficient raw material supply within the country, authorities have implemented a series of export quotas across different stages. These measures cover not only cotton and yarn but also spinning machines, power looms, handlooms, printing and dyeing units, and processing equipment. In September 2010, the Cotton Yarn Advisory Committee was established to monitor and regulate the nation’s cotton yarn stocks. So far, 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, especially in Tamil Nadu, where it serves as a cornerstone of the regional and national economic structure. With over 3,200 spinning mills nationwide, approximately 60% of them are located in Tamil Nadu. Unlike developed nations such as the United States, Indian yarn mills continue to expand their operations near cotton production areas. This has led to heightened government scrutiny and intervention in the cotton and cotton yarn sectors. Recently, the Chief Minister of Tamil Nadu wrote to the Prime Minister of India, urging an immediate halt to cotton exports until domestic demand is fully met. He also called for stricter controls on cotton yarn exports and an increase in cotton export taxes. These measures aim to prioritize local needs over international trade. Meanwhile, Indian textile mills are under pressure due to a growing backlog of orders. As of now, the industry has secured 779,000 tons in export contracts, of which 458,000 tons have already been fulfilled. The Indian Textile Association has urged the government to allow more flexibility in exports to meet contractual obligations. According to export regulations, cotton yarn exports must be completed within 45 days of registration, meaning that mills will need to finish the remaining 221,000 tons by mid-January 2011. Industry experts warn that in the coming months, Indian spinning mills will operate at maximum capacity, facing intense production challenges due to high demand and tight supply conditions. This situation highlights the delicate balance between meeting domestic needs and maintaining international competitiveness in the global textile market.