Indian apparel exporters have formally approached Commerce Minister Piyush Goyal, requesting government intervention to regulate cotton yarn exports. The appeal follows a sharp increase in cotton yarn prices, which have risen by approximately 60 percent, moving from about Rs 250 per kg in early 2026 to around Rs 400 per kg.
According to the Apparel Export Promotion Council (AEPC), the surge in raw cotton and cotton yarn prices is driven by supply-side constraints, reduced arrivals, and limited stock availability with ginners. These conditions have forced spinning mills to rely increasingly on Cotton Corporation of India (CCI) auctions.
AEPC Chairman A Sakthivel stated in a communication to the minister that a substantial quantity of cotton has shifted from farmers to traders, leading to hoarding and speculative practices in the market. The council has specifically urged suitable measures to regulate the export of cotton yarn, particularly counts of 20s and above, to ease pressure on the apparel manufacturing value chain.
The situation has been further compounded by rising costs of fuel and other raw materials. Additionally, the letter highlighted that restrictions imposed by the US under the Uyghur Forced Labor Prevention Act (UFLPA) on Chinese cotton have led to increased exports of Indian cotton and yarn to major apparel-producing nations such as Bangladesh and Vietnam.
The council noted that these higher raw material costs are hurting the competitiveness of Indian apparel exporters at a time when international opportunities are expanding, particularly in new Free Trade Agreement (FTA) markets like the UK and New Zealand.
Emphasizing the economic benefits of domestic value addition, the AEPC highlighted the differences in value realization and employment potential. While raw cotton fetches about Rs 275 per kg and cotton converted into yarn fetches around Rs 325 per kg, finished garments can fetch between Rs 800 and Rs 1,200 per kg after value addition.
"The sharp rise in raw material costs poses a significant challenge for manufacturing competitiveness and profit margins in the apparel sector. When input prices escalate rapidly due to supply constraints and speculative hoarding, domestic downstream industries often struggle to maintain global export parity. Balancing raw material exports with the needs of local value-adding manufacturers is crucial to sustaining long-term industrial growth and employment generation." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
