The Australian Cotton Shippers Association (ACSA) recently signed a memorandum of understanding with the Cotton Association of India (CAI), marking a significant milestone in strengthening bilateral cooperation between the two nations. This agreement follows a similar MOU signed by ACSA with the American Cotton Shippers Association and the Brazilian Cotton Shippers Association, demonstrating a commitment to advancing the global cotton industry through increased collaboration.
The signing of the MOU took place at the conclusion of an eight-day visit to India and Bangladesh by a delegation of ACSA representatives. During their visit, the delegation, which included ACSA members Cliff White, Joel Hatherell, Shay Dhareula, and CEO Jules Willis, engaged in discussions with various stakeholders in the cotton industry, including representatives from India’s Textile Export Promotion Council (TEXPROCIL), the Southern India Mills’ Association, the Indian Cotton Federation, and other key players in the market.
Additionally, the delegation met with the Australian Consul General from the Department of Agriculture, Fisheries, and Forestry, as well as Austrade’s Trade and Investment Commissioner, to discuss topics such as Australia-India trade relations, India’s economic outlook, the impact of US tariffs, Australian cotton exports to India, and market dynamics.
The signing of the MOU was described as a highlight of the visit by Austrade South Asia, emphasizing the importance of reinforcing the cotton supply chain between Australia and India. The MOU focuses on sharing market intelligence and production trends, collaborating on global pricing and forecasts, improving market access, advocating for enhanced tariff-free quotas for Australian cotton, and promoting mutual support for both markets.
India currently ranks as Australia’s third-largest cotton export market, accounting for 12% of exports in March, behind China and Vietnam. Under the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA), which came into effect in December 2022, India established a tariff rate quota allowing 51,000 tonnes of Australian cotton to enter duty-free each year, a significant reduction from the previous 11% tariff.
Since the implementation of the AI-ECTA, Australian exporters have utilized 99% of the quota amount, with 5,839 tonnes of cotton exported to India as of March 31. Efforts are underway to increase this quota to over 100,000 tonnes, with industry representatives advocating for a higher allocation to meet demand.
In addition to strengthening ties with CAI, ACSA continues to collaborate with Brazilian and American cotton shipping industry groups as part of the MOU agreement signed last year. The organizations are working together to promote the benefits of cotton fibers over man-made materials and explore initiatives like the international Make the Label Count coalition, which aims to ensure sustainability claims for textiles are credible and science-based.
Overall, the signing of the MOU between ACSA and CAI marks a significant step towards enhancing cooperation and driving long-term sustainability, trade, and mutual growth in the global cotton industry. This partnership underscores the importance of collaboration and dialogue among key industry players to address challenges and seize opportunities for the benefit of both nations.
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