Textile mills across the country stopped production for a day on Monday to protest the curbs in cotton exports, which they say has led to huge build-up of stocks and losses for the industry.
The ban, imposed in January, coupled with a decline in domestic demand resulted in huge unsold stocks, said industry officials. The spinning industry, which has more than 3,300 mills, produces yarn worth nearly Rs270 crore a day.
Later, when exports were allowed from April 2011, the accumulated stock caused cotton yarn prices to crash in both the global and domestic markets.
Adding to the woes, ''Consumers shied away from the markets because of their perception that prices would decline further since mills were flush with stocks and have to unload them at any cost,'' said Shishir Jaipuria, chairman, Confederation of Indian Textile Industry (CITI), which called for the ban.
With over 25 per cent share in the global market, Indian supplies are crucial to cotton yarn prices.
To boost demand, Jaipuria said, mills would also cut production by a third from Tuesday, bringing the daily yarn production down to Rs180 crore from Rs270 crore.