Growth Prospects for India ’ s Cotton and Textile Industries

Demand for cotton and manmade fibers in India will likely strengthen in response to rising consumer demand in India and increased exports of textiles and apparel following the removal of the Multifiber Arrangement quotas. The pace of growth in cotton demand will hinge on execution of reforms to policies, including taxes that discriminate against the use of manmade fibers and regulations affecting the scale, technology use, and export competitiveness of the textile and apparel industries. Imports of raw cotton have increased in concert with rising demand in recent years, but future growth will depend on the extent to which India can boost chronically low cotton yields and improve cotton quality.