Spinning mills in Tamil Nadu say Chinese yarn buyers and traders are crushing Indian yarn manufacturers by forming a cartel. A cartel is an agreement between competing firms to keep prices under control or check any new competitor’s entry into the market. Under this sellers or buyers agree to fix prices of selling, prices of purchase, or to lower production.

Yarn manufacturers want to be allowed to open common selling offices in China. They say this would help avoid exploitation by buyers, besides strengthening Indian players with updated and constant market intelligence.

The industry wants textile-specific trade pacts with various untapped markets to be initiated. Exports of cotton yarn and fabrics showed a positive growth of five per cent in September. The industry feels that with a huge capacity within the country, a little push and coordinated efforts will beat the downtrend in exports, helping the spinning and garment sectors to come out of the current trend of losses.

India’s yarn exports to China have declined by 20 per cent. Exporters have tried to make up elsewhere and there has been a slight rise in yarn exports to Sri Lanka, Bangladesh and Vietnam in recent times.