Cotton Industry and Exports

In FY23, exports of cotton yarn were valued at US$ 2.75 billion, that of cotton fabrics and made-ups were US$ 6.81 billion.

Source: Office of the Textile Commissioner

Last updated: Nov, 2023

Introduction

India is the largest producer of cotton globally. It is a crop that holds significant importance for the Indian economy and the livelihood of Indian cotton farmers. Cotton grows over 13.06 million hectares in India compared to 33.1 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 2022-23 (as per provisional data) was 34.3 million bales (bales of 170 kg each) and in 2021-22, it stood at 31.1 million bales. The Central Zone (which comprises states like Gujarat, Maharashtra, and Madhya Pradesh) was the biggest producer of cotton in India in 2022-23, with Gujarat being the highest producer of the Central Zone, contributing 9.49 million bales (bales of 170 kg each). 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 states like Telangana, Andhra Pradesh, Karnataka, and Tamil Nadu) is the second biggest producer of cotton, producing about 28.5% of the nation’s cotton, with Telangana producing the largest in the Southern Zone and the third largest in the country, contributing 5.31 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.

Export Trend – Total Product

In 2022, India stood as the third-highest exporter of raw cotton globally, accounting for about 11% of the total global exports. The value of the exports amounted to US$ 5.66 billion in 2022-23, US$ 10.78 billion in 2021-22, US$ 6.3 billion in the year 2020-21, and US$ 2.1 billion during April-June 2023. It amounted to 1.25% and 2.55% of India’s total exports in 2022-23 and 2021-22, respectively. As per the Cotton Corporation of India, India’s total cotton exports were 3.0 million bales in 2022-23.

The Government of India along with the Export Promotion Council has set a long-term target of US$ 100 billion for 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. To achieve these goals, the emphasis remains to motivate cotton farmers through awareness meetings, timely advisories and transfer of technology from the lab to the field in the most effective manner by using natural methods and adopting modern scientific farm practices.

Export by Country

In 2022-23, India exported cotton to over 158 countries throughout the world. Bangladesh, Sri Lanka, and China were India’s major cotton importers in FY23. Collectively, the three nations accounted for 45% of India’s total exports. Despite the COVID-19 pandemic, the export of cotton and cotton yarn from India has not stopped. Sri Lanka was the second largest importer of cotton from India after Bangladesh together accounting for over 40% of cotton imports from India. China and Egypt were among the largest importers of cotton from India making over 9% of the total cotton exports.

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 destinations for India’s cotton yarn with exports of 56 million kg and 53 million kg in 2020-21, respectively.

Government Initiatives

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.

The Government of India 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, the Confederation of Indian Textile Industry (CITI), one of the leading industry chambers of the textile sector in India has been working across 1,700 villages of Rajasthan, Madhya Pradesh, and Maharashtra in association with about 90,000 farmers to improve yield and production of cotton in a sustainable way.

Governing Body

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.