Seen From India Cotton Ban

Cotton, which is not a very sensitive textile material, has recently become a star, frequently appearing in newspapers in China and India. It originated in the influence and controversy caused by the India government's ban on cotton exports.

As the world's second largest cotton producer, India has exported nearly 70% of its cotton to China since October last year, accounting for more than a half of China's imports of cotton.

Roughly estimated, nearly 1/4 of China's cotton comes from India.

That is to say, one of the four clothes produced in China is cotton in India.

After experiencing the panic of cotton prices rising last year, the Chinese government took advantage of the decline in cotton prices this year, and seized large quantities of cotton, especially the low price of India cotton, thus promoting the rapid growth of India's cotton exports.

In principle, exporting cotton is also an opportunity for the India government to balance its long-term trade deficit with China.

However, the actual situation is much more complicated.

Under the pressure of the textile industry in India, in March 5th, the government of India suddenly issued a ban on cotton exports, causing the international cotton market to stir up waves.

India government

Textile industry behind export ban

According to print media, the pressure behind the cotton export ban comes from the India textile industry alliance.

The alliance claims that the ban on the India government has been delayed, and that India's cotton exports are far higher than the government's plan.

If cotton is exported in large quantities, it will affect the supply of cotton next season, raise domestic cotton prices in India and cause cost pressures to textile mills.

The textile industry is a pillar industry in India. Last year, it contributed 4% of the GDP, which provided more than 35 million employment opportunities for India. Its employment status in India was only inferior to that in agriculture.

At present, India's textile industry is also catching up with China in the global market.

It is estimated that India's textile exports will reach US $32 billion 350 million in the 2011-2012 fiscal year, an increase of 20.7% over the previous fiscal year.

At present, India textile ranks third in the export market of the European Union and the United States.

However, the concentration and production efficiency of the India textile industry has yet to be improved, and the recent challenge from Pakistan and Bangladesh in neighbouring countries has prompted the industrial alliance to impose pressure on the government to increase the supply of cotton, not only to lower domestic cotton prices, but also to promote international cotton prices, and to improve the competitiveness of the textile industry from the cost advantage.

Export ban, the effect is obvious, a large number of cotton hoarding India port, India cotton prices drop.

According to the agency's report, 40% farmers in India have an oversupply of cotton. Many farmers can't find warehouses to store cotton, and directly put cotton into the house.

The ban caused cabinet controversy.

Despite the ban on cotton, the views of the India government were far from unified, and the ban became the battlefield of India's cabinet.

On the day of the ban, the Minister of agriculture of India said in an interview with the media that he had not received any prior notice and said that the ban would cause serious damage to farmers and openly oppose the ban.

The two ministers of cotton production, gubjarat and Ma hastla, rushed to New Delhi to meet Prime Minister Singer and raise objections after the ban was issued.

The ban will have a serious impact on Farmers' income and will affect the upcoming general election.

Under various opposition pressures, Singer issued an urgent order on the second day of the ban, requesting the Minister of finance to take the lead to reassess the ban in March 9th.

On March 11th, Anand Sharma, Minister of Commerce and industry of India, said the government had decided to cancel the ban on cotton exports issued on the 5 th of this month and will be officially announced on 12.

What is the competitive advantage of India?

As a developing country with large population, India is most worried about competition from Chinese goods, even Indian textiles are no exception.

In India, Chinese tourists often complain that they bought a large number of distinctive India scarves and returned to "Made in China". I bought a pair of summer trousers in a stall market in Delhi, which is only 100 rupees (about 12 yuan). It is said that it is also a Chinese product and feels cheaper than in China.

5 years later, the India analysts said.

However, judging from the list of recent Forbes rich list, India's rich are far ahead of China in the two emerging industries of software and bio pharmaceuticals.

In the rich list of 2011, excluding the comprehensive industry, China has no rich list in the software industry, and there are 5 in India.

The total sales volume of Infosys, the second largest software company in India, is 3 times that of China's software outsourcing, reaching 6 billion US dollars.

In terms of biopharmaceutical industry, China has 8 listed companies, 9 billion 500 million US dollars, and 8 India listed companies, with net assets of US $22 billion.

Many biopharmaceutical companies in India have crowded into the global upstream. The total export volume of biopharmaceutical industry accounts for 35% of India's exports.

Although the overall pharmaceutical scale is smaller than that of China, it is in the leading position in the global market and technology content.

Kiran, an independent analyst in India, recently wrote that the revenue of India IT-BOP (IT business process outsourcing) in this fiscal year will be 100 billion yuan from 100 million US dollars 20 years ago, and India IT industry will enter a new milestone.

However, compared to the textile industry that provides the 35 million employment force, the IT industry in India only employs 2 million 800 thousand of the direct employees.

At present, the annual labor force in India is more than 20 million. How to satisfy these hungry young people is obviously unable to rely on high-tech industries that can not create large numbers of jobs, but also rely on underpowered "India manufacturing".