Cotton pilot scheme a hit, govt to extend it by a year

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“The special project on cotton to enhance production during 2023-24 was started in April 2023 till March 2024, engaging 15,000 farmers in 10 states. The final outcome of data would be analysed in January,” the second official said, adding that the data will be evaluated by Indian Council of Agricultural Research (ICAR).

Queries sent to the commerce ministry remained unanswered till press time.

The 10 cotton-growing states where the pilot is ongoing are Uttar Pradesh, Haryana, Punjab, Rajasthan, Madhya Pradesh, Gujarat, Maharashtra, Tamil Nadu, Andhra Pradesh and Karnataka. The estimated rise in production from the pilots could help India strengthen its cotton exports ecosystem, and provide a boost to the country’s standing in the global cotton export markets, where it has increasingly faced challenges from other cotton-exporting countries such as Bangladesh and Vietnam.

India’s exports of cotton, fabric, yarn and handloom products rose 5.7% during April-October 2023. This period saw exports worth $6,877 million compared to $6,509.51 million in the corresponding period of last year, according to commerce ministry data released on 15 November. This September, textile production grew 3.7% year-on-year (y-o-y), as per Index of Industrial Production (IIP) data released on 10 November 2023. In August, textile production grew at 1.6%.

Foreseeing a rise in textiles exports, Kulin Lalbhai, chairman, CII National Committee on Textiles and Apparel, said that the past 12 months have been a little tough on export demand because large global brands were reducing inventories. “I believe the demand scenario will improve as inventory positions have corrected, and brands will start normalizing their buying,” said Lalbhai, who is also vice-chairman, Arvind Fashion. “Currently, the prices are remaining benign. So, we are not expecting any major rise in the next [few] quarters.”

On the production front, though, India has witnessed a sharp decline in recent years. As per textile ministry data, annual production of cotton in 2017-18 was 37 million bales (170kg each), 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. In 2022-23, production of cotton was 34.75 million bales. And in the ongoing fiscal, the Cotton Association of India estimates that production may shrink to 31.6 million bales.

Cotton is one of the leading areas of economic activity for livelihood, and plays a pivotal role in the growth of the Indian economy. Around six million farmers are engaged in cotton production in India, and 35 million farmers grow cotton across the globe.

The ministry is also focusing on increasing footprints 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 set a growth target of $10 billion in the next five years. Technical textiles are engineered clothing products used by various industries. Some examples of their usage are sports gear, PPE kits, masks, aprons, etc.

“Indian textiles have become synonymous with unique designs, use of sustainable fibres and superior quality, making it a preferred choice for the western markets,” said Anand Ramanathan, partner, consumer industry leader, consulting, Deloitte India, adding that a ‘China Plus One’ strategy adopted by global brands after the pandemic and Indian suppliers’ product strength have opened up global strategic partnership opportunities for Indian brands.

These trends have been bolstered by support schemes and tax waivers from the government, which have helped textile exporters scale up their production, Ramanathan added.

India is actively pursuing free trade agreements to step up its overall exports in order 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, countries of the Association of Southeast Asian Nations (Asean) and members of the South Asian Association for Regional Cooperation (Saarc). India’s merchandise exports to all these countries have registered growth over the past decade.

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