Maintain a reserve of 25 lakh bales of cotton: AEPC to Govt

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SME Times News Bureau | 24 Feb, 2012
In order to protect the domestic textile industry, Apparel Export Promotion Council (AEPC) has urged the government to maintain a reserve of 25 lakh bales of cotton per year.

The surplus in cotton exports from India to China is creating a negative impact in the industry, the council said in a press statement today.

A total cotton export in the current year has been more than 85 percent which has been shipped to China. The reason for China importing a huge quantity of cotton from India is to increase their cotton reserve to offset the price fluctuation in future and also to maintain a regular cotton supply to the textile mills.

Considering the above, Dr. A Sakthivel, Chairman, AEPC said, "The Government has already permitted for export of 85 lakh bales of cotton this year and we capture that the textile industry would be deprived of getting good quality cotton and also face the scarcity in case, the export figure is revised further upwards."

Unlike China, the textile industry is facing exceptional hike of cotton prices and scarcity of cotton as India does not have the policy of keeping cotton reserve.

"We propose to the Government as a measure to protect the textile industry, to come out with the clear cut policy of reserving 25 lakh bales of cotton per year and this quantity of bale can be purchased and kept in reserve by Cotton Corporation of India (CCI). We are in process of requesting Exim bank to fund this initiative and AEPC also suggests the Government to implement this initiative by supporting the required amount to CCI. This initiative by the Government will provide more employment in the textile industry after agriculture," added Sakthivel.

Post the requisition being granted, the cotton export figures in the future will arrive only when the Cotton Advisory Board (CAB) includes cotton reserves as one of their items while preparing the cotton balance sheet.