Cotton industry is an ancient industry of India. It is predominantly based on cotton. It plays an important role in Indian economy. The Indian textile industry contributes about 11 percent to industrial production, 14 per cent to the manufacturing sector, 4 percent to the GDP and 12 per cent to the country's total export earnings. States like Gujarat, Maharashtra, Andhra Pradesh (AP), Haryana, Punjab, Madhya Pradesh (MP), Rajasthan, Karnataka and Tamil Nadu (TN) are the major cotton producers in India. In 2017-18, India’s cotton production was 34.86 million bales of 170 Kgs. each. China is the major importer country from India. The other major cotton importing countries from India are Bangladesh, Hong Kong, Egypt, Taiwan.

Nowdays; India is lagging in cotton exports to major markets due to a duty disadvantage vis-a-vis Bangladesh, Vietnam and Pakistan, a Confederation of Indian Textile Industry (CITI) study found. As per the CITI analysis, India’s raw cotton is going to various markets at zero duty instead of being converted to yarn or fabric, it results a neat loss of employment and foreign exchange. India exported $1.9 billion of raw cotton in 2017-18.