Apparel makers of Noida are facing losses in production post the international ban on Xinjiang cotton. In July, the US and few other countries banned the import of cotton from the Xinjiang region of China following reports of human rights violations against Uighur Muslims, who are mostly employed in cotton production.
As a result, Chinese manufacturers have reduced production in their country and booked large amounts of cotton yarn from India and other parts of Southeast Asia. This has led to an increase in the prices of yarn and thread for domestic traders, as most of the Indian cotton now gets exported to China.
Apparel manufacturers in the city said yarn prices had gone up by 70-80 percent in India, leading to an increased cost of production, according to this report in The Times of India. Since neighbouring countries like Bangladesh are exporting garments at cheaper rates, the losses have mounted all the more.
Lalit Thukral, president of the Noida Apparel Export Cluster (NAEC) told The Times of India that the cost of a dress they are now exporting is about Rs 588 ($8), which Bangladesh manufacturers can give for Rs 478 ($6.5)
The government's decision to levy an additional 10 percent import duty on cotton, is adding to their woes. Apparel makers said the increasing yarn export could also lead to job losses since it is not a labour-intensive industry. A Rs 100 crore investment in cotton production will employ about 300 people, while the same amount in apparel manufacturing will give jobs to 70,000 people, according to the report.
Source:financialexpress.com