Much of the growth in India’s cotton trade can be attributed to increased cotton production during the last three crops. Average production in 2004-05 and 2006-07 is estimated 60% above the average of the three previous years. The increase in production is largely due to higher yields, better cultural practices including a dramatic increase in Bt cotton acreage. Higher yields have supported growers’ returns compared to alternative crops and helped boost area.

The dramatic increase in production has outpaced India’s rapid consumption growth, which has averaged 5% annually since 2001-02. This has led to the shift of India being the second largest importer in 2001-02 to the second largest exporter in 2006-07.