In 2010/11, the Indian government announced a new policy to regulate cotton exports based on domestic supply. This move aims to ensure that local textile mills have sufficient access to raw materials, reducing concerns over shortages. The initiative is designed to balance the interests of both cotton farmers and the textile sector by prioritizing domestic needs before allowing any surplus to be exported.
The Ministry of Commerce, in collaboration with the Ministry of Agriculture and the Ministry of Textiles, will hold a joint meeting to assess the current year’s cotton production and consumption forecasts. Only surplus cotton—defined as the amount available after domestic demand is met—will be eligible for export. This is the first time the term "exportable volume" has been officially used in such a context. Cotton traders are permitted to export freely but must register with the Textile Commission beforehand. Any exports beyond the set quota will face tariffs, adding an extra layer of control.
However, the Indian textile industry remains skeptical about the accuracy of the figures provided by the Indian Cotton Advisory Committee (CAB). According to the CAB's forecast, out of the 680,000-ton stockpile, only 136,000 tons are actual cotton reserves that cannot be used for spinning, while the remaining 544,000 tons are raw materials already in the hands of textile mills. As a result, the current inventory may not be enough to meet the industry's needs. The new cotton season is expected to begin in November, and the Ministry of Commerce is under pressure to announce an export ban before December to prevent further strain on domestic supply.
Additionally, some textile exporters have called for a ban on the export of waste cotton, arguing that the domestic handloom sector relies heavily on it. When the government signaled its intention to resume exporting waste cotton, prices in India surged sharply, raising concerns about the impact on local textile and garment production. This development highlights the delicate balance between supporting different sectors and ensuring sustainable growth across the entire cotton industry.
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