On pressure from the textile value-added sector, the Cabinet Committee on Textile decided to further tighten the quantitative restrictions on export of yarn from 50 million kgs to 35 million kgs per month, till June 30, 2010.
In the month of January, the Committee had imposed a ceiling limit on exports of yarn at 50 million kgs. But it was brought to the notice of the committee that, in the same month 58 million kgs of yarn was shipped in contravention of the cap.
The government had imposed the cap on yarn exports to rein in rising prices of yarn as well as create proper availability of the same. But the cap had no effect as since the prices did not come down along with which exports also surpassed the ceiling limits.
However, the committee decided that yarn of value above $3.5 per kg, will be excluded from the ceiling limit and the decision would be implemented with immediate affect and the notification is expected to be issued in the next few days.
The value-added textile sector had observed that if immediate steps were not taken to ensure proper yarn supply, the whole value-added chain would collapse, leading to unemployment and chaos in the local economies.
Fibre2fashion News Desk - India
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