By: Leonie Barrie - 13 December 2010 15:31
India's restrictions on raw cotton and cotton yarn exports have given the country the advantage of lower material costs – at least for a while. But its actions have also sparked a round of aggressive trade protection, especially by other textile exporters in the region.
India's initial reaction was to limit raw cotton exports, which meant its cotton prices grew more slowly than elsewhere. But now the country has also extended the restrictions to cotton yarn too – a move that should widen the yarn price gap that has given Indian garment factories a competitive advantage.
Angered by India's stance, other textile exporters are also attacking each others' trade policies. India, Bangladesh, Vietnam and Peru have forced the WTO to reject EU concessions for Pakistani apparel and textile products. And Pakistani weavers are now lobbying their government to ban cotton and yarn exports.
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