Trade Mapping of India’s Cotton Export

Abstract

The present research empirically investigated the export comparative advantage of India’s cotton products and determined the potential target importing cotton markets using annual dated data sourced from FAO database, spanning from 2000 to 2013.The collected data were analyzed using the static revealed comparative indexes, neoclassical comparative index (Trade mapping analysis), market structure index (Herfindahl-Hirschman Index) and prioritization index models. The results of the findings showed that India has poor comparative advantages with the exception of cotton lint in the exportation of its cotton products due to specialization in the production of lint. However, from the sector point of view the country had revealed comparative advantage in the exportation of cotton. Furthermore, empirical evidence showed that the cotton lint been the major export earning India emerged in the export market over the study period despite commanding small share in the market, and is among the winner groups. Though, for the overall sector, the country is at a threshold in the export market and among the winner groups. Therefore, study recommends the need for increase productivity and production cut-costs in order to improve the position of its products export amongst the commercial competitors. In addition, the commercial production status and behavior of the major competing exporting countries (China and USA) need to be fully tracked or monitored by the major participants in the cotton value chain in other to deal with the effects of externalities. The research will help to breach the gap of India’s cotton share in the global market by exploring potential target markets for its product, thus enhancing its cotton foreign exchange earnings.