China and India produce almost equivalent quantity of cotton, but China is a net importer of cotton; India is a net exporter. Discuss making a case if India should follow China model in its cotton sector.
Hint: Although India gets export earnings from raw cotton exports, yet majority (70%) raw cotton exports from India are to China.
On the other hand, China uses its cotton and imported cotton to produce value added material such as fabrics, cloths and apparels. If there is a slump in overseas demand of raw cotton, India’s exports suffer. If the country was able to use more domestically grown cotton to produce value-added fabrics; it could have a great impact on the trade imbalance between the two countries in favor of India.
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