The recent surge in US upland cotton exports to India is a result of a combination of global tariff conflicts, declining US prices, and rising demand in the South Asian country.
During February and April, US cotton exports to India reached a 2.5-year high of 155,260 bales, up from 25,901 a year earlier. The increase coincides with growing trade tensions between the US and China, since China has imposed 125 per cent tariffs and is sending more US cotton to India.
Due to falling yields, India is becoming an importer of cotton instead of a net exporter. The nation mostly imports Extra Long Staple (ELS) cotton from the United States, which offers superior quality and yield and enjoys a 10 per cent tariff exemption.
Almost 8 per cent less than the previous season, the Cotton Association of India has reduced its production estimate for 2024 to 30.1 million bales. India might thus have a shortage of 2.5 million bales, which would probably be made up for by imports.
With US cotton increasing market share alongside imports from Australia, Brazil, and Egypt, India’s cotton imports are predicted to quadruple in 2024- 2025.
