Cotton Scenario in India:

India ranks third in global cotton production, after the United States of America and
China. Boasting an area of 10,500,000 hectares 1 (105 Lakh hectares) dedicated to the cultivation of
the cotton crop. India accounts for approximately 20% of the world's total cotton area under
cultivation and 12% of global cotton production (Cotton Corporation of India.) Cotton plays a vital
role in India’s economic growth by providing substantial employment and making significant
contributions to state earnings. Cotton accounts for nearly 60% of the fibre used in the textile
industry. Cotton provides direct livelihood to an approximate of 6 million farmers and about 40 t0 50
million people are involved in cotton trade and its processing.2
India accounts for nearly 32% of the global cotton area and contributes approximately 21% of the
total cotton produce, globally.3 The extraordinary thing about the cotton cultivated in India is that, this
is the only country known to produce all four cultivable varieties of the Gossypium species. The
Gossypium arboretum, G. herbaceum (Asian Cotton), G. barbadense L. (Egyptian cotton) and
G.hirsutum L. (American cotton) have superior quality. Out of these, G.hirsutum L. is most widely
cultivated because of its wide range of adaptation and high yield potential, while G. barbadense L. has
fine and unique fibre quality.3
Cotton Scenario 1947-1982
1947 was the year the Indian economy was finally freed from the British raj. The economy went from
a largely agricultural and trade based economy to a mixed economy, while maintaining a prime focus
on the agricultural sector. Industrialization and increased technological prowess, mad way for the
Green Revolution in 1961. As can be seen from the graph below, the production, which was steadily
on the rise since 1947; saw a sharp incline in the year 1961 marking the green revolution. Post 1961,
saw a steady increase in the area and the production of cotton.

10000
8000
6000
4000
2000
0

Area (In '000 Hectare)

Production (In 'ooo Bales of 170 Kgs. Each)
Productivity (In Kg./Hectare)

Source: Indiastat.com

1. International Cotton Advisory Committee, ‘PRODUCTION AND TRADE POLICIES AFFECTING THE COTTON INDUSTRY’

2. Ian Gillson, Colin Poulton, Kelvin Balcombe, and Sheila Page, ‘Understanding the impact of Cotton Subsidies on developing countries.’
3. Central Institute for Cotton Research, ‘Global Cotton Scenario’, Indian council for Agricultural Research (2011.)

Cotton Scenario 1982 – 2016

1982 onwards, saw a slump in regards to the production of cotton. Area cultivated remained low,
due to which production of cotton was also slow. A steady growth was observed in terms of both,
area and productivity from 1982 until 1996. Post 1996, showed a little increase in the production of
cotton, i.e. production increased to 12,861,000 bales (of 170 Kgs each); the highest growth in 14
years. In the year 2002, BT cottonseeds were introduced in India. BT cotton is genetically modified
by the insertion of one or more genes from a common soil bacterium, Bacillus thuringiensis. These
genetically modified seeds make the crop resistant to certain pests like the pink bollworm. The
introduction of these seeds, saw a dramatic increase in production across the cotton producing
states; and soon, Bt cotton overtook most of the acreage under cotton cultivation. It was also
observed that the import of cotton decreased gradually, and its export increased substantially.

Production and Area of Cotton in India

1982-2015
40000
30000
20000
10000
0

Area (In '000 Hectare)

Production (In 'ooo Bales of 170 Kgs. Each)
Productivity (In Kg./Hectare)

Source: Indiastat.com
 Imports & Exports on Cotton in India:
Imports:
It is a strange conundrum that a country like India, which is the third largest producer of
cotton, has to import cotton from elsewhere. One of the possible reasons for this is that, as
India’s produce of cotton grows, the demand grows; both domestically and in the
International market. Therefore, exports rise and so does consumption. In addition, to meet
the need of the consumers and traders, India resorts to the import of foreign cotton.
Another way, one can look at this is that due to crop failure, bad soil quality, drought, and
other agents leading to crop failure; the government has to import cotton. This fact can be
proven with the help of the graph below, as can be seen there is a steep rise in the import of
cotton from 1998-1999 – 2001-2002. This was the period before the arrival of the Bt cotton
in 2002. It was marked by a period of massive crop failure, due to limited technology and
scientific advancement. Cotton crops were highly prone to bollworm infestation, failure due
to bad weather conditions, and overuse of pesticides, etc. Post 2002, saw a steep decrease in
the amount of cotton imported by India.
Another reason could be that the domestic prices are higher than the International prices. With
deficit monsoon in many of the cotton growing areas, the textile mills are entering into contracts for
imports to ensure availability of cotton at a relatively lower price for the next few months. The
textile chain includes a sizable number of unorganized, small-scale units, which cannot afford
sudden rise in raw material costs. If there is a shortage or huge demand, cotton prices shoot up and
it has a cascading effect on different segments of the textile sector — spinning, weaving and
garment. Therefore, if the raw material cost is high domestically, mills would automatically prefer
the imported, cheaper cotton.

Imports
30
25
20
15
10
5
0

Source: Indiastat.com

Current Scenario of Imports:

Due to the rise in India’s exchange rate recently, by 4.8 percent versus the U.S Dollar, Indian

mills have contracted to import almost 3 million bales of cotton, in total.1 With stocks coming
from countries like, Africa, United States, Brazil and Australia. Tightness in the domestic
supply is also boosting imports, as Indian farmers hold off on deliveries in the hope of
achieving higher prices later in the crop year. Usually, imports are carried out in the second
part of the year, by Indian mills as the supply of cotton begins to decrease. But due to an
increase in the domestic price, owing to lack of raw material; more and more cotton mills are
turning to imported cotton.
4. https://in.reuters.com/article/india-cotton-imports/india-cotton-imports-set-to-surge-to-record-amid-rampant-rupee-idINKBN1720UF