The yarn market in India is dull. China and Bangladesh are not buying yarns and prices are low. China is a major market for Indian yarns but the trade war between the United States and China has affected the Chinese textile sector. The Indian textile sector has been heavily spinning based and this is the problem.

Gujarat is the number one cotton producing state in India. This year’s crop is expected to be of good quality due to the rains. The yield will be high and due to good quality yarn realization is also expected to be high. Ginning begins soon after Diwali. Gujarat has ramped up its spinning capacity since 2012, due to the state’s supportive schemes such as power and interest subsidies. Currently, the state has about 3.5 million ring spindles and has proximity to cotton—a positive aspect. But the upstream sector such as garmenting and finishing does not have the necessary capacity to cater to big markets. There is still a demand for value-added products to markets like the United States, which cannot be currently handled by the Indian textile sector. A structural shift is needed to focus on building value-added sectors such as garments and technical textiles.