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Bangladesh’s ban on Yarn

NEWS: Recently, Bangladesh closed its land ports for Indian yarn imports, restricting yarn imports to sea routes only.

WHAT’S IN THE NEWS?

India’s Role in Global Yarn Exports

Major Exporter of Cotton Yarn: India holds a significant position in the global textile market as one of the leading exporters of cotton yarn.
Primary Export Markets: Bangladesh and China are the two largest importers of Indian cotton yarn, with Bangladesh accounting for nearly 45% of India’s total yarn exports.
Export Growth to Bangladesh: Over the past five years, exports of cotton yarn to Bangladesh have grown at a strong Compound Annual Growth Rate (CAGR) of 25%, indicating robust bilateral trade in this sector.

Changes in Transportation Routes

Current Transport Mode: Approximately 30% of yarn exports to Bangladesh were previously routed through land ports like Benapole, Bhomra, Sonamasjid, Banglabandha, and Burimari.
Advantages of Land Routes: These land routes offered a faster and more cost-effective alternative to maritime transport, facilitating efficient trade with neighboring Bangladesh.
Policy Shift: Exporters are now required to use sea ports such as Mundra, Thoothukudi, or Nhava Sheva for shipping cotton yarn to Bangladesh.
Implication of Shift: This change is expected to increase overall export costs due to longer transit times and higher logistical expenses, potentially impacting export competitiveness.

India’s Textile Industry – Key Highlights

Economic Contribution: The textile and apparel sector contributes approximately 2.3% to India’s GDP, demonstrating its substantial role in the national economy.
Industrial Share: It constitutes 13% of the country’s total industrial production and 12% of overall exports, underlining its industrial and trade significance.
Export Value (2023–24): India’s textile exports amounted to USD 34.4 billion, with apparel contributing 42%, raw/semi-finished materials 34%, and finished non-apparel items 30%.
Employment Generator: The textile sector is the second-largest employment provider after agriculture, directly employing over 45 million people, including a large number of rural workers and women.
Global Position: India currently ranks fifth in the global textile market, with targeted policy efforts to accelerate its growth rate to 15–20% over the next five years.

India’s Cotton Export Profile

Export Destinations: Apart from Bangladesh and China, India also exports cotton to countries like Vietnam, Indonesia, Taiwan, and Thailand.
Report Insights: According to a 2024 report from the Ministry of Textiles, Bangladesh and China remain the dominant importers of Indian cotton due to their massive garment production industries.

Yarn: Definition and Types

What is Yarn?: Yarn is a long continuous strand made from natural or synthetic fibres, or a blend of both. It is the essential raw material used to produce fabric and textiles.
Types of Yarn Exported by India:

Cotton Yarn: Derived from raw cotton, primarily used in woven and knitted fabrics.
Man-Made Fibre (MMF) Yarn: Includes synthetic or cellulosic yarns like polyester, viscose, or blends, increasingly in demand globally.

Government Schemes for Textile Sector

Production Linked Incentive (PLI) Scheme for Textiles: Encourages investment and innovation in high-value MMF and technical textiles by offering financial incentives based on performance.
PM MITRA Parks: Aims to establish seven integrated textile parks to create world-class infrastructure and enhance textile manufacturing competitiveness.
Amended Technology Upgradation Fund Scheme (ATUFS): Provides capital subsidy for technology upgradation in textile manufacturing units.
Samarth Scheme: Focuses on skill development and capacity building in the textile sector, particularly among rural youth and women.
Textile Cluster Development Scheme (TCDS): Enhances infrastructure and ecosystem development for traditional textile clusters.
National Technical Textiles Mission (NTTM): Promotes research, innovation, and application of technical textiles in industries such as agriculture, defence, and healthcare.