Indian Cotton Industry

28.05.2025

Indian Cotton Industry

Context:

India, a major cotton producer, faces a shortfall in domestic supply. To meet demand and reduce prices, the government has temporarily suspended import duties until September 30, 2025.

Importance of Cotton in India

• Economic Significance: Cotton remains a vital raw material for the textile sector.
   
• Employment Contribution:
   
  • Approximately 6 million farmers are directly engaged in cotton cultivation.
     
  • Around 40–50 million people are connected to the cotton value chain, including processing, trade, and textile manufacturing.
     
  • Within India, the cotton textile sector ranks as the second-largest employer after agriculture.
     
• “White Gold”: Cotton is often referred to as “white gold” due to its economic value.
   

Cotton Cultivation in India

• Global Position:
   
  • India leads globally in terms of the area under cotton cultivation.
     
  • In terms of total cotton output, India ranks second, behind China.
     
  • India is also the second-largest consumer of cotton worldwide.
     
• Productivity Challenges: Despite large cultivation areas, India’s yield per hectare is relatively low compared to countries like the USA, China, and Brazil. This necessitates occasional imports to meet demand.
   
• Major Cotton-Producing Regions:
   
  • North: Punjab, Haryana, Rajasthan
     
  • Central: Gujarat, Maharashtra, Madhya Pradesh
     
  • South: Telangana, Andhra Pradesh, Karnataka
     
  • Gujarat is the largest cotton-producing state, while nearly two-thirds of cotton-growing areas depend on rainfall, particularly in central and southern India.
     
• Key Import Sources: Australia, the USA, Brazil, and Egypt are the main countries from which India imports cotton.
   

Botanical Details and Varieties

• Scientific Name: Gossypium spp.
   
• Cotton Species Worldwide: Four primary species are cultivated globally, and India uniquely grows all four:
   
  • Asian Cotton: G. arboreum and G. herbaceum
     
  • Egyptian Cotton: G. barbadense
     
  • American Cotton: G. hirsutum
     
• BT Cotton:
   
  • A genetically modified (GM) hybrid derived from G. hirsutum.
     
  • Developed to resist the Pink Bollworm pest, which has historically caused major crop losses.
     
  • Uses Bollgard-1 and Bollgard-2 technologies.
     
  • Commercially approved for cultivation in India.
     
  • These technologies are referenced in GM crop development.
     

Government Initiatives

• Mission for Cotton Productivity:
   
  • Launched as a five-year mission in the 2025–26 budget.
     
  • Implemented by the Ministry of Textiles.
     
  • Focuses on improving cotton yield and promoting extra-long staple (ELS) cotton, reducing reliance on imports.
     
  • Includes the “5F Vision”: Farm to Fibre, Fibre to Factory, Factory to Fashion, Fashion to Foreign.
     

Conclusion:

This temporary measure supports affordability and availability, stabilizing the cotton market. It underscores the government’s commitment to the textile sector, farmers’ welfare, and meeting domestic demand while enhancing India’s global cotton competitiveness.