Cotton is one of the principal crops of India and is the major raw material for domestic textile industry. India is self sufficient in cotton which provides the Indian textile industry a competitive edge worldwide in terms of low cost of raw material. With the healthy economic growth enjoyed by India over the past decade, the country's cotton consumption grew at a CAGR of 4.8 per cent in the period 2002-03 to 2012-13. While impressive, this growth has been outpaced by the production registering a CAGR of 9.4 per cent (CS – Cotton Season CS03-CS13) resulting from improved yields (especially due to the adoption of Bt Cotton). The domestic demand of cotton yarn is primarily driven by the growth in consumption of readymade garments and home textiles on account of rising income levels, growing organized retail segment and rising consumer class. In 2012-13, cotton yarn production increased primarily on account of strong demand from exports coupled with modest demand from the domestic user industries i.e. apparel and home textiles. China imports a substantial amount of cotton yarn from India, as the cost of production in that country is higher, owing to high cotton prices.
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