India’s Cotton Industry Hasn’t Reached Its Full Potential Yet
January 21, 2014 Cotton is one of the major cash crops for the Indian agriculture sector, as well as the most prominent raw material used in its textile industry. India was one of the first countries in the world to use cotton, and even today, it has the highest share of cotton of fiber consumption among all the textile-producing countries. Just a decade ago, India was a large net importer, but now it is the second-largest producer, consumer and exporter of cotton.
Advantage: India
India’s cheap labor, technical expertise and a growing domestic consumption are all major advantages for the development of the garment industry. India also has an inherent advantage due to the gentle ginning that all cottons receive, including ELS.
With India’s textile and apparel share already at approximately 4.5% of global trade, its potential is immense. The country possesses competitive advantages for textile manufacturing compared to most nations in the West. The organized textile sector in India employs more than 1.4 million people, and contributes about 4% to the country’s GDP and 10.1% more to total export earnings.
Cotton area, yield and quality, as well as energy and skilled labor, will have the greatest impact on Indian cotton industries over the next few years:
Cotton Area. In India, manual picking due to small land holdings and varied flowering periods of cotton plants remains prevalent. Currently, Indian cotton is one of the cheapest origins offered in international market. Cotton plantation costs are increasing every year, so retention of area under cotton production will be a major issue.
Yield. India’s yield of 526 kgs per hectare (ha) is lower than the average global yield of 761 kgs/ha and much lower than the yields in countries like Mexico, Brazil, China and Greece. Concerted efforts need to be made by all of the stakeholders in the cotton value chain to address this.
Quality. Although India is growing all four defined species of cotton and hybrid combinations, maintaining a homogeneous quality remains a problem. This is due to multiple varieties of certified and spurious seeds, different sowing and harvesting periods, a large rain-fed area under cotton cultivation, and deficiency of soil nutrients.
Power. Uninterrupted supply of power is an immediate need of the Indian textile industry to become competitive in the global market.
Labor. In the last 10 years, there have been more than $50 billion in investments in cotton textiles, mainly in southern and northern India. Most of the future expansion is expected in West India, in the state of Gujarat. However, a severe dearth of skilled labor is very likely going to result in a bottleneck to the targeted growth.
All Will Succeed, or None Will
For the cotton textile chain to be sustainable, companies in the entire value chain need to succeed. Farmers should grow cotton because they want to – not because they have to. Farmers need to be informed and educated about increasing the productivity and marketing of cotton to ensure they achieve the social, economic, and environmental benefits.
The biggest change required of Indian ginners is standardization of quality. Caught up in the enthusiasm of achieving high turnover, many Indian domestic traders and exporters have compromised quality and contract sanctity. Establishing practical and transparent trade policies and regulations will ensure that the quality and other disputes have adequate solutions.
The textile mills need to unite and promote discipline and consistency in cotton purchasing, incentivize quality cotton suppliers, and encourage value addition.
To meet the current and future demand, the cotton value chain has to be improved. This is possible through appropriate input management, improved supply chain management, backward linkages, standardization of trade practices, and achieving economies of scale by incorporating sustainable agricultural practices.
I believe it is important to discourage the “price wars” among players in the cotton value chain and promote the path of quality and excellence.
It is my core purpose and mission to assist cotton farmers in improving yield and quality, and helping cotton consumers to locate regular sources of quality cotton at nominal prices.
We should seek to prevent the arbitrary use of paper and plastic objects where cotton can easily be used instead as a renewable resource – for example, using a cotton handkerchief rather than tissue paper, or using cotton bags rather than plastic/paper bags – thus increasing cotton consumption and helping to save the environment.
Other changes that I believe should be made a priority include:
- Innovative and efficient implementation of new seed technology.
- Reducing the use of water and pesticides without compromising the yield and quality.
- Effectively using soil health cards and organic micronutrients to increase yields and make farm soil more sustainable.
- Investing in agri/bio technologies so farmers become can improve their incomes (Bt cotton is already a $7.5 billion sector for India).
- Promoting the growth of ELS cotton in the country on basis of agro-climatic research. Indian mills are facing an acute shortage of ELS cotton. With many ELS-growing countries reducing their output, enhancing the production of ELS cotton in India would help the industry to produce and export more value-added products.
Learning from the Past
As the second-largest producer, exporter and consumer of cotton in the world, India should have its own set of color grades and trade rules and regulations for arbitrations. The government needs to promote greater transparency and accessibility of updated statistics and information.
The capacity and efficiency of our ports also need to be improved so the industry can handle a larger quantity of exports. The government must provide incentives for the weaving, knitting and processing industries to encourage the manufacture and export of value-added products rather than raw material/partial-value-added ones.
Industry professionals and corporations must make a conscious effort to promote the use of cotton, capitalizing on the increasing awareness on eco-friendliness among consumers.
Cotton can be blended with synthetic fibers (polyester), man-made fibers (viscose) and natural fibers (ramie, Indian short wool, bamboo viscose). The functional properties of many such products need to be permanent in nature, because the current use of chemical finishes can have harmful environmental effects. Applications for cotton in technical textiles is another area that should be explored.
I firmly believe that a long-term vision and active cooperation among all of the stakeholders in the cotton value chain – farmer, trader, consumer and the government – will go a long way toward ensuring that India remains a global cotton power.
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