The cabbotage rule for transport of cotton along with several other products has been relaxed.
This is expected to greatly benefit lakhs of cotton farmers in Gujarat and spinning mills in Tamil Nadu. Foreign flag vessels might be in a position to offer competitive rates.

The cotton textile industry had demanded a relaxation of the cabbotage rule for transporting cotton from ports in Gujarat to ports in Tamil Nadu.

Though India is the largest cotton producing country and net exporter of cotton in the world, the domestic cotton textile industry could not derive a competitive advantage due to the steep increase in cotton transportation costs.

At the same time, countries like China and Vietnam transport cotton at a much cheaper cost.

Tamil Nadu spinning mills consume around 50 lakh bales of cotton grown in Gujarat.

During the peak cotton season the lorry freight per bale between a ginning factory in Gujarat and a spinning mill in Tamil Nadu was up to Rs 1000 a bale. The cost of transporting cotton from countries in West Africa to spinning mills in Tamil Nadu was around Rs 400 a bale.

Gujarat is the largest cotton producing state in India. Spinning mills in Tamil Nadu account for 47 per cent of the spinning capacity in the country.