Readymade garment exporters urge government to ban cotton exports
Indian readymade garment exporters are urging the government to ban cotton exports from India because prices are rapidly increasing and this is making it challenging for them to deliver export shipments on time.
“Worst affected are the medium and small enterprises [MSME], which constitute more than 80% of the production base,” said the president of the Noida Apparel Export Cluster Lalit Thukral, ET Bureau reported. “Delivery of garments to the foreign buyers is being delayed.”
Delays in order fulfilment can be very costly for export businesses. Some foreign buyers demand a 30% discount on their order if it delayed for over 15 days or demand air transport at the cost of the exporter, an industry source told the Economic Times. These payments would negate any potential profit for the exporter during an already financially uncertain time.
Many garment exporters believe that banning cotton exports will help to stop the price hikes thus enabling garment exporters to get back on track with their orders. On May 13, the Union Government announced that it was banning exports of wheat for a similar reason so the textile industry hopes the government will do the same with cotton.
Allowing the export of cheap cotton is also giving India’s main competition in the garment export market the upper hand, according to ET Bureau’s sources. Countries such as Bangladesh and Vietnam are able to import cheap cotton from India to produce cheap garments and export them at cheaper prices.
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