Commerce minister Piyush Goyal has appealed to traders to export only surplus cotton and yarn, but stopped short of imposing an outright ban on these exports — a key demand voiced by readymade garment exporters.

Garment exporters are battling a surge in cotton and yarn prices and have turned to the government with their plea for an export ban as in the case of wheat. Many have claimed that they face severe penalties for delayed exports and are being pressured to export goods by air, raising their costs and wiping out profits.

The government has formed a Cotton Council of India, which will hold its first meeting on May 28 to discuss a number of issues relating to the textile sector.

The Council will be headed by 87-year-old Suresh Kotak, who is known in the industry as the Cotton Man of India. The panel will have members from textiles, agriculture, commerce and finance ministries.

The minister said the government is also actively considering the demand of the spinning sector for exemption from import duty on those import contracts in which bills of lading have been issued up to 30th September 2022.

The price of cotton increased from Rs 44,500 per candy in February 2021, when an 11 per cent import duty was levied on cotton, to Rs 90,000 per candy in March 2022.

The steep increase in cotton price and its impact on yarns and fabrics is impacting the cotton textile value chain.