The Apparel Export Promotion Council (AEPC) has urged Union Minister of Commerce and Industry Piyush Goyal to consider suitable measures to regulate cotton yarn exports, particularly of 20s count and above. According to reports from Business Standard, cotton yarn prices have increased by around 60 per cent, rising from approximately ₹250 per kg in early 2026 to around ₹400 per kg currently. As per The Hindu BusinessLine, this sharp price increase is creating significant pressure on India's apparel manufacturing value chain, with AEPC Chairman A Sakthivel noting that rising prices of raw cotton and cotton yarn are increasing due to supply-side constraints.
The limited stock availability with ginners and reduced arrivals have resulted in mills relying increasingly on CCI (Cotton Corporation of India) auctions, as reported by Business Standard. Sakthivel highlighted that substantial quantity of cotton has moved from farmers to traders, contributing to hoarding and speculative practices in the market. The council's Chairman emphasized that rising costs of other raw materials and fuel are aggravating the situation, further impacting industry competitiveness.
According to the council's letter to the Minister, there has been an increase in exports of Indian cotton and cotton yarn to apparel-producing countries such as Bangladesh and Vietnam following restrictions by the US on the use of Chinese cotton under the Uyghur Forced Labour Prevention Act (UFLPA). As reported by Business Standard, this development has added to the pressure on raw material prices across the garment value chain, with higher apparel manufacturing costs affecting the competitiveness of Indian apparel exporters at a time when opportunities are expanding in international markets, particularly in new FTA markets such as the UK and New Zealand.
As reported by Business Standard, raw cotton currently fetches approximately ₹275 per kg, while cotton converted into yarn fetches around ₹325 per kg. In comparison, a kilogram of garments, after value addition, can fetch between ₹800 and ₹1,200. This significant margin compression highlights the impact of rising raw material costs on the apparel manufacturing sector's profitability, with the letter noting that substantially higher value realisation and employment potential associated with exports of finished garments compared with raw cotton and yarn.
