Incentives for raw cotton and yarn exports that were withdrawn in September have been restored back. The Directorate General of Foreign Trade (DGFT), a unit of the trade ministry, gave no reason for restoring export benefits for yarn, a value-added product used by textile mills.

India, the world's second-biggest raw cotton export, has restored an incentive scheme for cotton yarn exports, an official order said on Thursday.

Traders has projected that India will ship around 8-9 million bales of raw cotton in the crop year to September, down from 10.1 million bales in 2012/13.

D. K. Nair, secretary general of the Confederation of Indian Textile Industry said yarn exports could rise 10 percent in 2013/14 due to increased demand from China as it plans to end a raw cotton stockpiling programme to support domestic growers

He further added that those who will export more than last year will be eligible for a 2 percent incremental export benefit.