India's textile industry has seen a significant increase in cotton imports from Australia in 2022 compared to previous years, with a value of $283.766 million, representing a 4.28-fold increase in value and a 2.66-fold increase in volume from the previous year.

This surge in imports can be attributed to record-high prices of natural fibers and the exemption of import duties on cotton to support the industry during the 2021-22 crop market year. Although India and Australia had entered into the Economic Cooperation and Trade Agreement (ECTA), high prices last year led to an increase in imports beyond the agreement's restrictions. India's textile industry imported 80.860 million kg of cotton last year.

India's textile industry is a major consumer of cotton, but the country's domestic cotton production is often not enough to meet the industry's demand. Therefore, India imports cotton from various countries, including the United States, Brazil, and Uzbekistan. The United States has been the largest supplier of cotton to India, followed by Brazil and Uzbekistan. In 2020-21, India imported around 1.3 million bales of cotton from the United States, 540,000 bales from Brazil, and 320,000 bales from Uzbekistan.

India's total cotton imports during the 2020-21 crop year were estimated to be around 14 million bales, with the country's cotton imports steadily increasing due to a shortage of domestic cotton production and growing demand from the textile industry. According to the USDA, India is expected to remain a significant importer of cotton in the coming years due to the country's rapidly growing textile industry and the limited availability of high-quality domestic cotton. The USDA predicts that India's cotton imports could reach 2.5 million bales in the 2022-23 marketing year, up from an estimated 1.9 million bales in the previous year.

The increase in cotton imports from Australia provides some relief to India's textile industry when domestic cotton prices rise excessively, and the duty-free access to Australian cotton under the ECTA agreement is a significant development for the industry. The peak of cotton imports from Australia was $173.933 million during the third quarter of last year, well before the arrival of the new crop, when Indian cotton prices were still very high.

The surge in cotton imports from Australia, along with India's reliance on imports from other countries, highlights the challenges facing India's textile industry in meeting its demand for cotton. While duty-free access to Australian cotton provides some relief, the industry will need to continue to explore additional sources of cotton imports to meet its growing demand.