Cotton Industry of India

Cotton is India’s one of the principle crop in India. It plays a vital role in the Indian Economy by providing employment to substantial number of countrymen.

• Cotton provides direct employment to 60 Lakh farmers of the country and provides indirect employment in cotton related industry to around 4-5 Crore People.

Cotton is also one of the largest foreign exchange earner commodities of India.

• Apart from providing one of the basic necessities of life, the textile industry also plays a pivotal role through its contribution to industrial output, employment generation and the export earnings of the country. It contributes about 14% to the industrial production, 4% to the GDP and 14.42% to the country’s export earnings.
  

Production Status:

• During the year 2008-09, the cotton production in the country was estimated to be 290 lakh bales as against the production of 307 lakh bales during the previous year.

As per the “Agriculture Statistics at a Glance 2009” in 2007-08, India’s 9.41 million hectares was under cotton cultivation. In Cotton cultivation area Maharastra leads with 3.20 Million Hectares. However in Production, Gujarat leads all states with a share of 83 Lakh bales of 170 kilograms each. This accounts to 32% share of cotton production in India. The following table shows the cotton production and area under cultivation in 2007-08, which is the latest reliable data.

Area under Cultivation

• India has the distinction of having the largest area under cotton cultivation at around 9 million hectares and constitutes around 25% of the total area under Cotton Cultivation in the world.
• In 2008-09, the area under cotton cultivation was 9.37 million hectares.
• Out of this 65% is rainfed area and 35% is irrigated area.
• 6.88 million hectares (73%) used BtCotton.
  

Export:

Cotton production is projected at 335 lakh bales for 2010-11 marketing season. The domestic industry demand is around 220 Lakh bales. Government of India had liberalized raw cotton exports since July 2001, dispensing with the system of allocation of cotton export quota in favor of different agencies and traders. Exports of cotton from the country are under Open General License (OGL) since July 2001. The quota fixed for 2010-11 is 55 Lakh bales and the export started from October 1, 2010. However, Agriculture Minister Sharad Pawar had made a statement on 22 September 2010 that there is a scope for increasing it to 75-80 lakh bales.

Imports:

Imports of cotton into India are under Open General Licence (OGL) since April 1994. From 8th July 2008, the Government of India has abolished the import duty of 10% along with countervailing duty of 4% on cotton imports. Thus, the textile mills in the country are at liberty to import cotton as per their requirements. In 2008 India imported 10 Lakh bales of cotton.

Varieties:

• India is the only country in the world which grows all the 4 species of the cotton cultivated. These species are

1. Gossypium arboreum (Asian Cotton)
2. Gossypium herbaceum (Asian cotton),
3. G.barbadense (Egyptian cotton)
4. G. hirsutum (American Upland cotton)

Please note that Gossypium hirsutum (Egyptian cotton ) represents 90% of the hybrid cotton production in India and all the current Bt cotton hybrids are G. hirsutum.

Names of Some Popular Hybrid Varieties of Cotton:

• Assam Comilla, Bengal Desi, Jayadhar, Marathwada & Khandesh , Jhurar, Bunny Brahma, Brahma, Bunny, Suvin
  

Productivity of Cotton is Poor:

• India’s Cotton Productivity is far behind many countries of the world. The Highest Productivity is in China (1251 kg/ hectare). World average of cotton productivity is 766 kg/ hectare and in India the Cotton productivity is 567 kg. /hectare

Why there is low Productivity?

• Main reason is that 65% of area under cotton cultivation is rainfed. With the further possibility of higher use of Bt seeds/ Hybrid seeds and a decline in the cost of such seeds, it is projected that by the terminal year of XI Five year plan (2007-2012), the yield per hectare will increase to 700 kgs and cotton production will reach the level of 390 lakh bales.

Technology Mission on Cotton (TMC):

Technology Mission on Cotton is a scheme launched by Government of India on 21st February 2000. The idea was to increase the productivity, improvement in quality and reduction in the cost of production. It has 4 Mini missions viz. Mini Mission I , Mini Mission II , Mini Mission III , Mini Mission IV. The scheme had finished its tenure on 31st march 2007, but the Mini Mission III , Mini Mission IV were extended up to 31 March 2009 and later till 31 March 2010 in terms of target and completion of the ongoing projects.

1. Mini Mission I: Cotton research and technology generation. (Implementation by ICAR)
2. Mini Mission II :Transfer of technology and development. (Ministry of Agriculture)
3. Mini Mission III : Improvement of marketing infrastructure. (Ministry of Textiles )
4. Mini Mission IV: Modernization/ upgradation of factories. (Ministry of Textiles)

Fund Sharing in MMI & MMIV:

• Under MM-III 60% of the cost of development is borne by the Government of India and the balance by the Agricultural Produce Marketing Committee (APMC) / State Government concerned.

GOI assistance is limited to ` 1.50 crores for setting up of new yards and ` 0.90 crores for improvement of existing market yards. Under MM-IV, capital incentive @ 25% of the total cost of modernization / upgradation of Ginning and Pressing factory with a ceiling of Rs. 20 lakh per unit is borne by the GOI and the rest by the entrepreneur. Further, for installation of new bale press
and HVI/MVI laboratories, additional incentive of Rs 7 lakh and Rs. 4 lakh respectively has also been allowed.

Importance of Cotton

• India’s textile Industry is predominantly cotton based and 65% of the cloth production depending upon cotton.

Cotton Corporation of India

Cotton Corporation of India was established in 1970 under Companies Act 1956. It’s a Government of India’s corporate agency, engaged in diverse activities related to trade, procurement, and export of cotton. CCI is governed by Textile Policy 1985 issued by Ministry of Textiles, Government of India. The role assigned to the CCI under the Textile Policy of June 1985 was:

1. To undertake price support operations whenever the market prices of kapas touch the support prices announced by the government of India without any quantitative limit
2. To undertake commercial operations only at CCI ‘s own risk; and
3. To purchase cotton to fulfill export quotas given to CCI

CCI operates in the following states as of now.

Punjab, Haryana, Rajasthan, Gujarat, Maharastra, Madhya Pradesh, Andhra Pradesh, Karnataka , Tamil Nadu and Orissa.