Increased Domestic Consumption of Cotton Yarn Supports Value Addition

Chennai: In the midst of slow exports, cotton yarn factories saw tugging in domestic demand. The increasing consumption by the downstream industries helps yarn manufacturers to register sales growth and contribute to higher value.

Cotton yarn exports fell 5 percent in 25 financial years due to a weak decrease from China. Bangladesh, China and Vietnam collectively make up about 59 percent of Indian cotton yarn exports. In FY2025, export volumes to China fell by 66 percent.

However, 67 percent of the production, which constitutes 67 percent of domestic yarn consumption, has grown by 2 percent by balanced the lower export demand.

The industry is likely to shift the gears in the FY2026 further, with a strong withdrawal from the lower flow segments, such as yarn demand, especially the appearances that benefit from global seller diversification programs.

Clothing exports increased by 10 percent in 25 financial demands from the US and Europe to 15.9 billion dollars. Bilateral trade agreements with different countries are expected to increase clothing exports in 26 financial years.

ICRA expects domestic yarns to report a 4-6 percent and 6-9 percent income increase in 26 financial years. The Indian cotton spinning industry saw a modest improvement in FY2025. This follows a suppressed demand period from the last segments in the previous two years.

Higher yarn consumption by downstairs down industries supports higher valuable additional and increasing employment production, which improves general export growth. Despite slow yarn exports, total textile exports increased by 6.32 percent in 25 fiscal years and rose to $ 36.6 billion.