India bans cotton exports citing global textile unions

The U.S., EU, Turkey, and Mexico textile groups jointly requested the Indian government to restrict the export of cotton (28795, 645.00, 2.29%), resulting in a global shortage of raw cotton and soaring prices, and to take restrictive actions.

The groups that hired more than a million laborers claimed that India violated the WTO rules and dealt with the global market turmoil caused by India’s cotton anti-trading behavior.

Including the National Council of the Textile Organizations (NCTO), The Committee of the Cotton and Allied Textile Industries of the European Communities (Eurocoton), and the Mexican National Textile Industry Chamber of Commerce (Camara Nacional de la Industria Textil, Canaintex), the Turkish Textile Employers Association (TTEA) and the Istanbul Textile and Apparel Exporter Associations (ITKIB) to the EU Executive Committee at the end of October this year ( European Commission, EC) and individual government letters indicate that the Indian government has illegally restricted cotton exports since April this year, leading to a substantial increase in the cost of cotton raw materials for the textile industry other than India.

Since India began to restrict cotton exports in April, cotton prices have increased by almost 100% from 62 cents per pound to a record high of US$1.3 per pound.

India’s actions and the poor harvest of other major cotton producing countries this year have made the global demand for cotton more urgent.

The group said that India, the world’s second largest exporter of cotton, has enjoyed a large cotton crop in history, but it has unreasonably limited cotton exports for six months.

Hacoit Benoit, president of Eurocoton, pointed out that in this situation, the competition is seriously distorted. As a result, European textile and processing industry workers will face difficult choices: they will not be forced to pay expensive prices to buy cotton, they will have to endure increased competition, and they will lose the processed clothing at a low price. Sales to the European Union; or must move production equipment and job opportunities outside Europe to reduce production costs, or even simply shut down.

David Garcia, president of Mexico's Canaintex, added that the Indian government has clearly violated WTO regulations and should be subject to accountability for improvement. He said that it was not possible for India to illegally subsidize its domestic players by restricting cotton exports or embargoes, and forced Mexican textile companies to pay for high-priced cotton.

TITA President Halit Narin and ITKIB Chairman Ismail Gulle and Hikmet Tanriverdi are concerned that India's ban on cotton exports has led to soaring cotton prices, which will cause a recovery in Turkey's textile industry recovery. They also noted that although the Indian government has repeatedly pledged that restricting exports by cotton will be a short-term measure, it has continuously disrupted the supply of the export market for six months.

The NCTO president, Cass Johnson, believes that for the first time, American textile mills are worried about the use of raw materials for cotton, because India restricts cotton export practices, making global supply tight and even causing a rush to purchase cotton.

China's state-run large-scale textile mills are now willing to pay any price to purchase cotton, which jeopardizes the textile industry that the United States has just recovered.

The textile groups in the US, Europe, and the United States noted in their letter that their country’s textile industry will face the possibility that the price of cotton will continue to rise, or that there will be no supply of cotton at all. In either case, if India continues to extend its restrictions on cotton exports, their textile industry will not survive. The group members also urged its government to lodge a strong protest with the Indian government and demanded that India lift its restrictions on global cotton exports.