Rising yarn prices hurt competitiveness
Key Highlights
- Apparel exporters have urged the government to regulate cotton yarn exports.
- Cotton yarn prices have increased around 60 per cent since early 2026.
- Prices have reportedly risen from around ₹250 per kg to ₹400 per kg.
- AEPC said supply constraints and reduced cotton arrivals are increasing pressure.
- Rising yarn prices are affecting the competitiveness of Indian apparel exports.
- Exporters highlighted higher value addition and employment potential in finished garments.
New Delhi, August 29, 2026: Apparel exporters have urged Commerce Minister Piyush Goyal to consider measures to regulate cotton yarn exports as rising domestic prices increase pressure on the competitiveness of India’s apparel industry.
The Apparel Export Promotion Council (AEPC) has raised concerns over the sharp increase in prices of raw cotton and cotton yarn, which it said is affecting the entire apparel manufacturing value chain.
AEPC Chairman A. Sakthivel said supply-side constraints, limited stock availability with ginners and reduced arrivals of cotton have contributed to the rise in prices.
According to the industry body, textile mills are increasingly relying on auctions conducted by the Cotton Corporation of India due to tighter availability in the market.
The AEPC also said a substantial quantity of cotton has moved from farmers to traders, contributing to concerns regarding hoarding and speculative practices.
The council has urged the Commerce Minister to consider suitable measures to regulate exports of cotton yarn, particularly yarn of 20s count and above.
Cotton yarn prices have reportedly increased by around 60 per cent, rising from approximately ₹250 per kg in early 2026 to around ₹400 per kg currently.
The increase is placing additional pressure on apparel manufacturers, while higher prices of other raw materials and fuel are further increasing production costs.
The industry body also pointed to rising exports of Indian cotton and cotton yarn to major apparel-producing countries such as Bangladesh and Vietnam.
This trend has gained momentum following restrictions imposed by the United States on the use of Chinese cotton under the Uyghur Forced Labor Prevention Act, creating additional demand for cotton and yarn from alternative sources.
AEPC said the higher demand has added pressure to raw material prices across the Indian garment value chain.
The rise in manufacturing costs comes at a time when Indian apparel exporters are seeking to expand their presence in international markets, including new free trade agreement markets such as the United Kingdom and New Zealand.
Sakthivel also highlighted the significantly higher value realisation and employment potential associated with exporting finished garments instead of raw cotton or cotton yarn.
According to the industry estimates cited by the AEPC, raw cotton can fetch around ₹275 per kg, while converting cotton into yarn can increase the value to approximately ₹325 per kg.
In comparison, a kilogram of finished garments, after further value addition, can generate between ₹800 and ₹1,200.
The apparel industry believes that ensuring adequate domestic availability of cotton yarn at competitive prices could help manufacturers increase value-added garment production, strengthen exports and generate additional employment.
