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Indian cotton exports to Pakistan unlikely to increase despite duty cuts

India's cotton exports to Pakistan are unlikely to increase, despite the neighbouring country scraping import duty, as high domestic prices have made exports uncompetitive. Indian cotton is currently available around Rs 43,000 a candy, while prices in Pakistan are at sub Rs 43,500 making it (exports) unviable so far.

Recently, Pakistan scrapped duties on import of cotton for February 1-June 30 to tide over shortage of the crop. Indian traders, usually large exporters to Pakistan, would have benefited, but for their high procurement cost. In 2015-16, India had exported over 2.5 million bales of cotton to Pakistan when crop there fell over 30 per cent. In the current year, Pakistan has harvested 10.8 mln bales of cotton, down 25 per cent from initial target of 14.4 million bales. But the situation is different this time. Indian prices are not competitive. If rupee depreciates or prices in Pakistan rise exports will pick up

Indian cotton can reach Pakistan in just one day through roads from Punjab or even via sea route it can reach in three-four days, as against 20-45 days from other regions such as Africa, the US or Australia.

 

 
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