The Noida Apparel Export Cluster (NAEC) on Sunday sought immediate intervention of the government in containing high cost of cotton yarn and fabrics, saying rising prices are impacting exporters.
NAEC president Lalit Thukral suggested control in cotton exports, removal of 10 per cent cotton import duty, and development of a mechanism to regulate the prices of cotton and other raw materials to support the sector.
”Apparel industry is facing a severe problem of high cost of cotton yarn and fabrics. During the last couple of months the cotton prices have been hiked up to 80 per cent. The prices of the cotton per candy of 335 kg went to Rs 74,000 from Rs 37,000. In apparel making, 75 per cent of raw material used is cotton,” he said. He added that the unexpected steep price rise of the cotton posed a great challenge to the apparel manufacturers and exporters as it is hurting the production cost, which has been increased many folds. ”Indian exporters are losing export orders and facing tough competition in the global export market. Moreover, they are also losing confidence of the importers and the buying houses,” Thukral said, adding the major reason for this situation is unchecked export of cotton to competing countries like Bangladesh, Vietnam and Thailand.
MSME apparel production units are facing the high price rise issue along with capital and liquidity crunch.
He added that the prices of the fabrics have been increased to Rs 40-50. Bangladesh, Vietnam Thailand and other countries are manufacturing apparels with low production cost because of cotton imported from India and posing strong competition to India in the global market.
”Immediate intervention of the government is needed to save the apparel industry,” he said adding ”unlike Bangladesh, we are not having free trade agreements”.