Should India follow China Model in Cotton?

Cotton provides direct employment to around 60 Lakh farmers and indirect employment  to around 4-5 Crore People via cotton based industries. It is also one of the largest foreign exchange earner commodities of India. It is base of cotton textile industry which plays pivotal role in Indian economy by its employment generation, export earning and industrial output.

India vs. China: Should India follow China Model in cotton?

China and India produce almost equivalent quantity of cotton. While China is largest producer; all of its cotton is consumed locally by industries and China is a net importer of Cotton. On the other hand, India is second largest producer but also a large exporter of cotton.

• Although exports of cotton earn foreign exchange; yet it is one of the main imports of China from India. About 70% of our agri export to China is raw cotton.
• The Indian cotton is converted into value added textiles in China and then exported to several countries of the world.
• Further, since a huge amount of cotton and cotton yarn is exported to China; any slump in demand from China affects Indian cotton prices and farmers badly.

Thus, if India was able to consume more domestically grown cotton to produce value-added fabrics; it could have a great impact on the trade imbalance between the two countries in favour of India.

It is interesting to note that China is the largest importer of rice in the world and India is the largest exporter but China does not import rice from India J.