Introduction
India is the largest producer of cotton globally. It is a crop that holds significant importance for the suitable economy of India 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 34.062 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 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 170kg each).
Export Trend – Total Product
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$ 6,319.09 million in the year 2020-21, and US$ 9,863.97 million 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.
Export by Country
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.
Between October 2020-April 2021, Bangladesh and China accounted for over 80% of cotton imports from India. Vietnam and Indonesia were the other top importers contributing to over 15% of India’s total cotton exports.
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.
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.
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