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Major Indian Cotton Growers Stunted by Lack of Mills

Though India’s Vidarbha region produces approximately 6.2 metric tons, or 25% of the country’s cotton each year, the region’s industry has been stunted by an insufficient number of cotton mills.

Vidarbha’s handful of mills can only process about 30% of the cotton it produces, which means that the majority of its cotton is shipped and then processed (ginned, spun, woven, and dyed) elsewhere in the country.

Fabric (or processed yarn) is much more valuable than unprocessed yarn, and the region’s inability to process their own yarn has proven both expensive and inefficient.

As Suresh Kotak, chairman of Kotak Commodities told the Times of India, “In cotton crop, 67% is the seed, while the remaining is cotton which moves up the value chain.”

Gautam Singhania, chairman of Raymond Woollen Mills, complained that although his company owns a plant in Vidarbha, “we are forced to buy 30% yarn from other states because we cannot procure it locally.”
But attracting new mills to region is no easy task.

Mills require dependable and affordable sources of energy, which have yet to become commonplace in Vidarbha, and the region lacks the Effluent Treatment Plants (ETP) necessary to deal with production waste. In the opinion of some, government incentives will be necessary if the region wishes to lure new investors.

Dilip Jiwrajka, managing director of Alok Industries, told the Times that “Major incentives need to be given to textile mills if they are to be made commercially viable…Unless you provide major incentives to industry, no one will set up shop.”