The Indian government has decided to restrict cotton yarn exports for a second time in as many years. It has set a limit of 845 million kg for the financial year 2011-12, up from the cap of 720 million kg in the last financial year.

The decision was made by a joint committee of ministry of textiles, finance and commerce.

A similar cap is also being contemplated for cotton exports but officials said it is too premature to decide about cotton since crop estimates are yet to come. However, they explained that most mills are running carryover stock of cotton to make yarn this year and exports are continuing. Therefore a cap would be decided to ensure there would not be a shortage of yarn in the domestic market until the new crop arrives.

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