Indian business representatives are calling on the government to allow cotton exports only against letters of credit (L/Cs).

The calls are motivated by sharp increases in the price of cotton, which is in very short supply now in India.

Export limits

Cotton prices in India have nearly doubled over the last year, threatening the Indian garment manufacturing industry that had substantially recovered after the economic downturn.

In a bid to ease the shortage and price of cotton, the Confederation of Indian Textile Industries (CITI) is calling on the government to limit exports.

Specific calls

The CITI is specifically recommending that cotton export contracts should only be allowed on L/ C terms.

The confederation is also calling for cotton exports to be restricted to just 5.5 million bales this year.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.