India: Effects of Tariffs and Nontariff Measures on U.S. ... - USITC

Cotton
During MY 2003/04–2007/08, <strong>India</strong> became the second-largest global producer <strong>of</strong> cotton
after China. <strong>India</strong>n production feeds <strong>India</strong>’s extensive textile mills, which enjoyed higher
textile export dem<strong>and</strong> during this period. <strong>India</strong> had its sixth consecutive record cotton
crop in MY 2008/09 as a result <strong>of</strong> increased planting <strong>and</strong> higher yields from improved
hybrid varieties <strong>and</strong> Bt cotton, 128 improved crop management practices, <strong>and</strong> favorable
weather. 129 Cotton planted area increased by 24 percent over the period, reaching
9.4 million hectares in MY 2007/08. This was true even though cotton must compete for
area with other crops (rice <strong>and</strong> fodder crops in the north; coarse grains, pulses, <strong>and</strong>
sugarcane in the central region; <strong>and</strong> rice, tobacco, <strong>and</strong> chilies in the south) that also
enjoyed strong prices <strong>and</strong> relative pr<strong>of</strong>itability, particularly in MY 2008/09. 130 Cotton
yields have nearly doubled—they increased 90 percent between 2002 <strong>and</strong> 2007, versus
10 percent or less for corn, rice, <strong>and</strong> soybeans during the same period 131 —but are still
below the world average, leaving room for production gains despite limited additional
area for planting cotton. 132
128 Bt cotton was introduced in 2002 <strong>and</strong> accounted for 85 percent <strong>of</strong> cotton area in MY 2008/09.
129 Singh, <strong>India</strong> Cotton <strong>and</strong> Products Annual 2008, May 12, 2008, 1.
130 Ibid., 4.
131 Ibid., 5.
132 Industry sources expect area for cotton production to peak at 10 million ha. Singh, <strong>India</strong> Cotton <strong>and</strong>
Products Annual 2008, May 12, 2008, 5.
F-18