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Cotton Industry

Cotton Industry and Exports In India
India is the largest producer of cotton globally. It is a crop that holds significant importance for the Indian economy and the livelihood of the Indian cotton farmers. Cotton grows over 11.7 million hectares in India compared to 31.2 million hectares globally. The Indian cotton industry provides livelihood to about 60 million people in the country.
India’s total production of cotton in the year 2021-22 was 34.1 million bales (bales of 170 kg each). The Central Zone (which comprises of states like Gujarat, Maharashtra, and Madhya Pradesh) is the biggest producer of cotton in India, with Gujarat being the highest producer of the Central Zone and the country at 8.516 million bales. Saurashtra constitutes about 70% of Gujarat’s cotton production, with farmers in Amreli - the state’s largest cotton district – playing a key role. Yavatamal, Buldhana, Akola Amravati Nagpur Washim, and Wardha are the districts of Vidarbha which are Maharashtra’s major cotton-producing areas.
The Southern Zone (which comprises of states like Telangana, Andhra Pradesh, Karnataka, and Tamil Nadu) is the second biggest producer of cotton, producing about 30% of the nation’s cotton, with Telangana producing the largest in the Southern Zone and the third largest in the country, contributing 6.587 million bales (bales of 170 kg each). The cotton textiles industry is the second largest employer in the country after agriculture, while also sustaining the livelihoods of an estimated 6.5 million cotton farmers and driving a large export market.
In 2020, India stood as the third highest exporter of raw cotton globally, accounting for about 10.2% of the total global exports. The value of the exports amounted to US$ 6.3 billion in the year 2020-21, and US$ 9.9 billion between April 2021-February 2022. It amounted to 2.16% and 2.61% of India’s total exports in 2020-21 and between April 2021-February 2022, respectively. As per estimates provided by Committee on Cotton Production and Consumption (COCPC), India’s total cotton exports are estimated to be 4 million bales in 2021-22.
The Government of India along with the export promotion council has set a long-term target of US$ 100 billion of textiles industry exports by 2025-26 and growing productivity from the current level of around 450 Kg lint per hectare to at least 800-900 Kg lint per hectare. The focus continues to adopt the latest innovative technologies and global best farming practices to enhance productivity and achieve sustainable quality cotton output. For achieving these goals, the emphasis remains to motivate cotton farmers through awareness meetings, timely advisories and transfer of technology from lab to field in the most effective manner by using natural methods and adoption of modern scientific farm practices.
In 2021-22, India exported cotton to over 159 countries throughout the world. Bangladesh, China, and Vietnam were India’s major cotton importers between April 2021-February 2022. Collectively, the three nations accounted for 60% of India’s total exports. Despite COVID-19 pandemic, the export of cotton and cotton yarn from India has not stopped. China is the second largest importer of cotton from India after Bangladesh together accounting for over 80% of cotton imports from India. Vietnam and Indonesia are among the largest importer of cotton from India making over 15% of the total cotton exports.
In 2020-21 cotton season (October 2020-April 2021), India exported 2.20 million bales to Bangladesh which is marginally higher than 2.19 million bales of cotton exported to China out of the total exports of 5.5 million bales. Vietnam was the third highest importer of India’s cotton at 0.64 million bales during the same period.
In terms of cotton yarn exports, about 275 million kg of cotton yarn was exported from India to China out of the total exports of 980 million kg during the year 2020-21. China was the largest importer of yarn from India followed by Bangladesh which imported 225 million kg of cotton yarn. Vietnam and Peru are among the key export destination for India’s cotton yarn with exports of 56 million kg and 53 million kg in 2020-21, respectively.
The government has been implementing various policy initiatives and schemes to encourage cotton spinning millers in the country, including the announcement of key reforms under a Special Package that includes additional incentives under the Amended Technology Upgradation Fund Scheme (ATUFS), relaxation of Section 80JJAA of the Income Tax Act, and the introduction of fixed-term employment for the apparel sector. Under the Market Access Initiative (MAI) Scheme, the government offers rebates on state and central taxes and levies that are integrated into production, as well as aid to exporters. Schemes like SAMARTH (Scheme for Capacity Building in the Textile Sector) aim to address the shortage of skilled workers in the textile sector with a target of training 10 lakh people.
Government of India has launched Mega Investment Textiles Parks (MITRA) during the Union Budget for 2021-22 under which seven textile parks will be established over a period of three years. This will enable the textile industry to become globally competitive, boost employment generation and attract large investments. Additionally, Confederation of Indian Textile Industry (CITI), one of the leading industry chambers of the textile sector in India is working across 1700 villages of Rajasthan, Madhya Pradesh, and Maharashtra in association with about 90,000 farmers for improving yield and production of cotton in a sustainable way.
Cotton Corporation of India (CCI)
The Cotton Corporation of India was established in July 1970 under the administrative control of the Ministry of Textiles, the Government of India as a Public Sector Undertaking under the Companies Act 1956. Initially, CCI served as a canalizing agency for cotton imports and raw cotton purchases in order to provide required pricing support to enterprising planters and to procure raw cotton for textile mills. CCI’s role now however is to stabilize prices by enforcing price support measures whenever the market prices fall below the government decided price supports. CCI also conducts commercial purchasing operations to meet the domestic textile industry's raw material requirements, particularly during the lean season.
Source: India Brand Equity Foundation

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