India is the second largest cotton producing country in the world after China. China’s share is 6.6 times that of India. The interesting fact is that, together China and India consume 60% of the world cotton output. For India cotton was the No. 1 performing commodity in 2010 as well as in the 1st quarter of 2011. This has resulted in attracting huge speculative interest although cooling of prices due to supply competition.

Although the acreage of land under cotton production has risen in India, cotton yields are about 475 kg per hectare which is approximately 38% below the global average. In India, cotton plants are placed widely because of hand picking technique of contrast to other leading growers, such as the USA and Australia. Cotton Production in India may touch a record 38 million bales by October,  This estimate is far above the forecast by the nation’s cotton advisory board for the year at 31.2 million bales.

As of July, the area under cultivation is 5.89 million hectares which is lower when compared to previous year acreage of 8.44 million hectares. Last year the farmers got a very good price for their yields of cotton. After the prices that farmers got last year, I don’t think they would want to plant any other crop than cotton; the crop would have been bigger if the government had not restricted exports.”, Currently, the major problem faced by Cotton growing areas in India is insufficient rainfall. The regions mainly affected are Gujarat, Andhra Pradhesh, Karnataka, and Tamil Nadu. Rains were as much as 43% below normal between June 1 and July 18, the weather bureau data showed for Gujarat. According to the statistics by United States Department of Agriculture (USDA), India has produced 27 million of 480 pound bales of cotton till June.
However, the good news is that, The government on Sunday withdrew the ban on exports of cotton for the remaining part of the current cotton season (2010-11) and put it under Open General License (OGL). The Indian cotton season runs from October to September.
This was announced by the Commerce Secretary – Rahul Khullar, who said cotton exporters will henceforth have to only register with the Directorate General of Foreign Trade (DGFT).
The decision was taken at a meeting of secretaries of the Commerce, Textiles and Agriculture Ministries held last week.