Spin in cotton exports

While cotton growers are pleased at the increase in cotton prices, boosted by relaxation of export curbs, the textile industry, particularly apparel exporters, seem uneasy. Their main worry is that the sustained 18-month rally in cotton prices and the consequential spurt in the cost of cotton yarn would dent the competitiveness of India-made garments in the global bazaar. Indeed, apparel exports have slumped by 8 per cent in the first five months of this fiscal. But, the silver-lining is that the bad patch for the textile sector seems to have, more or less, ended. The global demand for garments, which had remained subdued since the beginning of the economic recession, has begun showing signs of recovery. Besides, some of Indias formidable rivals, notably China and Bangladesh, appear set to lose the competitive edge due to anticipated rise in their production costs.

Full "Business Standard: Economy & Policy" article