A pilot project launched this April to boost cotton production in 10 states is likely to be extended by a year beyond March 2024, two officials aware of the development said. Cotton production in these states is estimated to increase by 20-25%, which is a substantial increase at a time when all-India cotton production is on the decline. Officials, speaking on condition of anonymity, said adoption of best agronomic practices, quality seeds and high-density planting systems have contributed to this growth.
“The special project on cotton was launched in April 2023 to March 2024 to increase production during 2023-24, covering 15,000 farmers from 10 states. The final result of the data will be analyzed in January,” the second official said, adding that the data will be evaluated by the Indian Council of Agricultural Research (ICAR).
Questions sent to the Commerce Ministry remained unanswered till press time.
The 10 cotton growing states where the pilot project is underway are Uttar Pradesh, Haryana, Punjab, Rajasthan, Madhya Pradesh, Gujarat, Maharashtra, Tamil Nadu, Andhra Pradesh and Karnataka. The projected increase in production from the pilots could help India strengthen its cotton export ecosystem, and boost the country's position in global cotton export markets, where it competes with other cotton-exporting countries such as Bangladesh and Vietnam. Are facing challenges.
India's exports of cotton, textiles, yarn and handloom products grew by 5.7% during April-October 2023. According to Commerce Ministry data released on November 15, exports during this period stood at $6,877 million compared to $6,509.51 million in the same period last year. According to the Index of Industrial Production (IIP) data released on November 10, 2023, textile production grew by 3.7% year-on-year this September. In August, textile production grew by 1.6%.
Expecting growth in textile exports, CII National Committee on Textiles and Apparel Chairman Kulin Lalbhai said the last 12 months have been a bit tough on export demand as big global brands were reducing inventories. Lalbhai, who is also the vice-president of Arvind Fashion, said, "I believe the demand scenario will improve as the inventory position corrects, and brands start normalizing their purchases." "Currently, prices remain benign. Therefore, we do not expect any major increase in the next [few] quarters."
However, on the production front, India has seen a steep decline in recent years. According to textile ministry data, annual production of cotton was 37 million bales (of 170 kg each) in 2017-18, which fell to 33.3 million bales in 2018-19. After seeing growth in 2019-20 (36.5 million bales), production fell again to 35.25 million bales in 2020-21 and 31.12 million in 2021-22. Cotton production in 2022-23 was 34.75 million bales. And in the current fiscal year, the Cotton Association of India estimates production may decline to 31.6 million bales.
Cotton is one of the major sectors of economic activity for livelihood, and plays an important role in the development of the Indian economy. About six million farmers are engaged in cotton production in India, and 35 million farmers grow cotton worldwide.
The ministry is also focusing on increasing presence in technical textiles, which is a growing market. Currently, India is exporting technical textiles including medical apparels to the tune of $2.5 billion and has set a growth target of $10 billion in the next five years. Technical textiles are engineered textile products used by various industries. Some examples of their uses are sports gear, PPE kits, masks, aprons, etc.
“Indian textiles have become synonymous with unique designs, use of sustainable fibers and superior quality, making it the preferred choice for western markets,” said Anand Ramanathan, partner, consumer industry leader, consulting, Deloitte India. The 'One' strategy adopted by global brands post-pandemic and the product strength of Indian suppliers have opened up opportunities for global strategic partnerships for Indian brands.
Ramanathan said these trends have been boosted by government support schemes and tax exemptions, which have helped textile exporters increase their production.
India is actively working on free trade agreements to increase its overall exports to boost domestic growth. However, high interest rates in Western markets are dampening demand.
India has signed 13 regional and free trade agreements with various countries such as Japan, South Korea, Association of Southeast Asian Nations (ASEAN) countries and members of the South Asian Association for Regional Cooperation (SAARC). India's merchandise exports to all these countries have registered growth in the last decade.
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