Indian cotton yarn prices have eased by up to 2% in key trading hubs after a reduction in export incentives under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme compressed overseas margins.
Market participants said the downward correction was visible across major textile centres including Tiruppur, Ludhiana, and Surat, where exporters recalibrated offers to remain competitive in global markets.
Traders noted that the revised RoDTEP rates have reduced the cushion available to yarn exporters, particularly those shipping to price-sensitive destinations such as Bangladesh, China and Turkey. With international demand already subdued and competition intensifying from other producing countries, mills have been forced to trim yarn prices to secure orders.
Industry sources said that while domestic demand remains relatively stable, export-linked segments are bearing the brunt of the incentive cut. Some spinning mills are reportedly operating at lower capacity utilisation amid thin order books and shrinking spreads between raw cotton and yarn realisations.
The price adjustment is expected to weigh on mill margins in the near term, though stakeholders are hopeful that stable cotton prices and seasonal demand recovery could lend some support in the coming months.
Exporters are urging policymakers to review incentive structures, arguing that competitive parity is essential to sustain India’s position in the global cotton yarn trade.