Global Cotton Industry

Exploring India’s Dominance in the Global Cotton Industry: Challenges, Trends, and Opportunities


Introduction

India stands as an unparalleled leader in the global cotton industry, deeply entwined with the nation’s economy and the livelihood of its populace. Cotton cultivation spans over 11.7 million acres in India, a significant proportion compared to the global average of 31.2 million hectares. This vast agricultural domain supports approximately sixty million people, highlighting the sector’s critical role in the socio-economic fabric of the country. In the fiscal year 2021–22 alone, India produced an impressive 34.1 million bales of cotton, each weighing 170 kg. Gujarat, a prominent state within the Central Zone, leads the country with an output of 8.516 million bales, particularly from Amreli, a district that accounts for nearly 70% of Gujarat’s cotton production.

Cotton Production in India

The Central Zone, encompassing Madhya Pradesh, Maharashtra, and Gujarat, is the heartland of India’s cotton production. Gujarat, with its substantial contribution of 9.49 million bales in 2022-23, exemplifies the region’s dominance. Telangana, positioned third nationwide and first in the Southern Zone, produced 5.31 million bales. This zone, which includes Andhra Pradesh, Karnataka, Tamil Nadu, and Telangana, is the country’s second-largest cotton producer, responsible for 28.5% of the total output. The cotton textile industry is second only to agriculture in terms of employment, engaging about 6.5 million farmers and significantly contributing to the national export market.

Global Cotton Industry Presence

India’s prominence in the global cotton market is underscored by its status as the third-largest exporter of raw cotton, holding over 11% of the world export share in 2022. The export values have shown remarkable growth: from $6.3 billion in 2020-21 to $10.78 billion in 2021-22. During 2022-23, the exports stood at 5.66 billion US dollars, comprising 1.25% of India’s total exports. The Cotton Corporation of India reports that 3.0 million bales were exported in 2022-23. The Indian government, in collaboration with the Export Promotion Council, has set an ambitious target of US$ 100 billion for textile exports by 2025-26, aiming to boost productivity and maintain high-quality standards through modern agricultural practices.

Export Destinations

India exported cotton to over 158 countries in the fiscal year 2022–23, with Bangladesh, Sri Lanka, and China being the top importers. These three countries accounted for 45% of India’s cotton exports. Despite the challenges posed by the COVID-19 pandemic, India continued its cotton and yarn exports robustly. Bangladesh alone accounted for more than 40% of India’s cotton yarn exports. India exported 980 million kg of cotton yarn in 2020-21, with China and Bangladesh being the major importers. Additionally, significant quantities were shipped to Vietnam and Peru, showcasing India’s expansive reach in the global market.

Challenges in the Cotton Export Industry

The Indian cotton export industry faces several challenges:

  1. Raw Material Sourcing: The reliance on imported raw materials due to limited arable land makes the sector vulnerable to global price fluctuations and supply shortages.
  2. Demand Fluctuations: International market conditions significantly impact demand, complicating sales forecasting and production planning.
  3. Infrastructure Deficiencies: Inadequate infrastructure, including ports and warehouses, leads to shipping delays and interruptions.
  4. International Competition: Countries like China and Brazil pose formidable competition, excelling in logistics, quality, and pricing.
  5. Quality Regulations: Stringent government-imposed quality standards pose challenges in meeting necessary criteria and obtaining export approvals.

Literature Review

Numerous studies have highlighted various facets of India’s cotton industry. For instance, Saleem Khan (2017) noted the potential for coastal transportation to enhance cost-efficiency in the Southern India Mills Association (SIMA) report. Ping Wang and H. Kanchan (2020) discussed government initiatives like the Amended Technology Upgradation Fund Scheme (ATUFS) and SAMARTH, which aim to bridge skill gaps in the textile sector. Sheikh Jafar Emran (2022) emphasized the government’s plan to build textile parks to boost competitiveness and employment. Muhammad (2020) detailed the role of the Cotton Corporation of India in price stabilization and raw material acquisition.

Singh and Ahmad (2020) addressed the tariff disadvantages faced by Indian exporters in key markets, advocating for policy interventions to extend the Rebate of State and Central Taxes and Levies (ROSCTL) scheme to cotton yarn and fabric exports. Myneni, Pokhara, and Karthik (2020) examined the impact of tariffs on cotton and cotton waste, highlighting the increased costs for raw materials. Desikan and Padmanabhan (2019) identified potential markets like Russia, Vietnam, and Turkey where India could expand its cotton yarn exports. Amin and Hossain (2023) discussed global cotton output variations and the decline in Indian exports to Bangladesh and Egypt.

Research Methodology

The study employed a descriptive and exploratory research approach, collecting primary data through questionnaires distributed via online surveys using Google Forms. A sample of 75 individuals working in the cotton industry provided responses, which were analyzed using frequencies, histograms, pie charts, and bar graphs. Microsoft Excel facilitated data visualization, ensuring relevant and straightforward information.

Data Analysis

The demographic data revealed a diverse respondent age group, with the majority being 56 and above (36%). Educational qualifications varied, with the majority holding doctorates (42.67%). Experience in the cotton yarn industry also varied, with 34.67% having more than 10 years of experience.

The survey responses indicated a high importance placed on export marketing strategies (30.67% strongly agree) and effectiveness of current marketing efforts (30.67% very effective). Understanding international market trends was deemed crucial by 29.33% of respondents. The level of competition in the international market was rated as very high by 37.33%.

Confidence in adapting to export regulations and policies was high among respondents, with 32% being extremely confident. Satisfaction with current distribution channels varied, with 28% being very satisfied. Investment in export marketing activities was considered very high by 32%. The utilization of digital platforms for promotion was rated very well by 33.33%. The importance of brand positioning and reputation was highlighted, with 25.33% considering it extremely important. Customer feedback was deemed very influential in shaping export marketing strategies by 26.67%.

Conclusion

India’s cotton industry remains a global powerhouse, significantly contributing to the economy and supporting millions of livelihoods. Despite facing numerous challenges, including competition, infrastructure deficits, and stringent regulations, India’s strategic initiatives and government support aim to bolster its global presence. Continued efforts to enhance productivity, maintain quality, and expand market reach are crucial for sustaining growth. By leveraging modern agricultural practices and embracing digital platforms, India can navigate the complexities of the global cotton market and secure its position as a leading exporter.

The comprehensive analysis underscores the critical need for targeted strategies and robust infrastructure to harness the full potential of India’s cotton industry. As the sector evolves, ongoing research and adaptive measures will be essential to address emerging challenges and capitalize on new opportunities in the global market.

 

 

 

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