The Apparel Export Promotion Council (AEPC) on Saturday urged the government to impose restrictions on exports of cotton yarn in order to curb prices and increase supply for domestic manufacturers.

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AEPC Chairman A Sakthivel said despite several efforts by the government to reduce the price of cotton yarn, it has consistently increased in the last four months and was affecting the entire value chain.

"We request immediate intervention to increase the supply of yarn to domestic manufacturers. We suggest that quantitative restrictions should be imposed on exports of cotton yarn, specifically on cotton yarn of 26 counts and above," he said.

Sakthivel further said the Cotton Corporation of India (CCI) has reduced the price of cotton for small mill owners but this did not result in a reduction of cotton yarn prices.

"The rate of increase in yarn prices far exceeds that of cotton prices. The steep increase in prices and unpredictability in the availability of yarn means that garment exporters cannot honour commitments they made to their customers.

"This has also affected handloom and power loom weavers badly. Looms have stopped production. Due to this, the domestic industry has also got affected adversely," he added.

The AEPC chairman said the sector would be hit hard if the yarn is exported at the cost of the domestic and export-oriented manufacturing industry.

"We also suggest that export duty should be levied on exports of cotton yarn. This will result in a sharp decline in domestic yarn prices and an increase in value addition and employment in the country. "This will also help in increasing garment exports. And, it will result in only normal profits accruing to yarn spinners, not the super normal profit owing to the profiteering currently happening," Sakthivel said.