The government decided to lift the ban on cotton exports following wide-spread opposition to the move. Commerce and Industry Minister Anand Sharma announced the decision to allow overseas sales. India is the world’s second largest producer of cotton. According to the Government this move has been taken, Keeping in view the interests of farmers, traders and industrialists, a balanced view had been taken to roll back the ban on cotton exports.

The government had banned exports of the fibre on March 5 fearing a fall in availability in view of rising consumption at home. According to the ministry, higher exports than anticipated in cotton season 2010-11 reduced the expected carryover of stock for the current cotton season 2011-12, from 48.30 lakh bales estimated by the Cotton Advisory Board to about 33 lakh bales. At the same time production this season was virtually the same as last year’s, and total supply marginally lower.

The above said decision of Government of India shall now benefit only traders of cotton fibre, as they have procured at much lower prices from farmers and now they will be getting enough margins from exports and other duty reimbursements. The farmers will be benefitted in 2012-13 season beginning from October this year only whereas foreseeing this move of Government the area under crop may rise.