India’s cotton exports to Iran jumped a phenomenal 1070 per cent last year. Amid slowing raw cotton exports in recent months, India has seen a sharp jump in cotton demand from Iran, an unexpected buyer. One reason could be the trade sanctions western nations have imposed on Iran. And Iran pays in rupee denomination and the payment comes directly to the Indian bank account. This is possible because Iran sells oil to India in rupees.

During the April-June period of 2019-20, India’s exports of raw cotton to Iran were up 813 per cent on a year on year basis. Many small exporters have already sent cotton consignments to Iran. All the same exports to Iran don’t make much of a difference to Indian overall cotton export prospects. These prospects are hampered by the non-competitive prices of Indian cotton in international markets. If the scenario of higher prices continues to persist, Indian exports may fall further next year.

India’s cotton exports were reported at 44.64 lakh bales till April 30, 2019. Exports for the season ending September 2019 are expected to hover at 46 lakh bales, which are lower by 23 lakh bales compared with the previous year’s cotton export estimate of 69 lakh bales.