Conflict of interest within the country has lead to imposition and a probable withdrawal of ban on cotton exports. The government has reintroduced export ban on cotton three days back to ensure enough supply of cotton for domestic textile industry. Another reason for the ban was that the stipulated yearly quota for exports was also surpassed.
Now, the government is under pressure from the ministry of agriculture to withdraw the ban. The ministry has informed the government that cotton production during the year is adequate and there will not be any supply shortages even with exports.
Export of cotton means farmers are getting competitive price. On the other, for the domestic industry, an export ban is stable supply as well as cushioned price. The price may be decoupled at low level so that the domestic firms can get the full advantage of having domestically available cotton. India is the second largest producer of cotton and a major exporter.
The government’s cotton export ban has produced global impacts as well. After the ban, cotton prices soared at various commodity markets.
China Cotton Association has criticized the export ban and requested the Indian government to withdraw it. China is the largest importer of Indian cotton. Around 60% of India’s exports goes to China. Cotton imports from India is a lifeline for the Chinese Textiles Industry which is the largest exporter of textile products in the world.
The Prime Minister is expected to review the export ban decision, after the intervention from political leadership of Maharashtra and Gujarat. The government may not take yet another political risk by annoying the cotton farmers of the two states especially after the UPA’s recent election debacles.
By: Diya Philip