CCI has implemented block chain systems to improve traceability

The Cotton Corporation of India (CCI) is a ‘Miniratna’ company under the Ministry of Textiles, Government of India for trading of cotton. CCI’s primary mission is to safeguard the India’s cotton farmers from distress sales, while simultaneously supplying quality cotton to the textile industry. Lalit Kumar Gupta, Chairman and Managing Director, The Cotton Corporation of India (CCI), discusses the present state of the industry and its latest trends in a conversation with Divya Shetty.

Kindly brief us about CCI.

The journey of CCI began in July 1970 as a canalising agency for import of cotton. In the year 1983, CCI was appointed as a Nodal Agency to undertake Minimum Support Price Operations for cotton. Now, the major role of the CCI is to undertake Minimum Support Price (MSP) operations on behalf of Govt of India as and when the prices of Fair Average Quality (FAQ) grade seed cotton fall below the MSP level. Besides MSP operations, to fulfill the raw material requirement of the domestic textile industry, CCI also undertakes viable commercial purchase operations as and when required.

During the global pandemic, in the years 2019-20 & 2020-21, under the dynamic leadership of Honourable Union Minister of Textiles, Government of India, CCI has not only saved the farmers from distress sale but has also become the only organization in the entire globe which has procured more than 225 lakh bales under MSP operations and disbursed Rs 62,500 crore directly into the bank account of 45 lakh farmers.

In order to further strengthen work culture, transparency, accountability and also to enhance result orientation, CCI is promoting the use of information technology in its core activities and has considerably reduced manual intervention in pursuit of the concept of the paperless office.

Manual systems are minimized by CCI in the procurement of cotton. Equipment like moisture meters and micronnaire testers are available at all procurement centres of CCI to ensure that farmers get the right price for their produce, based on a scientific assessment of quality at the spot. CCI also introduced a robust system for on spot Aadhar based farmer registration and payment through PFMS Portal directly into bank account of cotton farmers to ensure benefit of MSP to genuine cotton farmers. Besides this, CCI developed a Cott-Ally mobile app for farmers in nine regional languages to increase the awareness about MSP rates, nearest procurement centers, payment tracking, best farm practices etc,

Likewise, in order to have direct interaction and outreach with buyer mills and for making the sales system more transparent and market driven, 100 per cent sales of lint cotton bales and cotton seed are made through an independent e-auction portal managed by a PSU.

With its pragmatic approach in procurement as well as trading of cotton, CCI has not left any stone unturned and is making remarkable efforts in complementing government initiatives for the upliftment of cotton farmers and the brand image of Indian cotton.

How was your performance in FY23?

CCI is the only central nodal agency to undertake MSP operations in the event when market prices of seed cotton (kapas) fall below the MSP announced by the Government of India, so as to protect cotton farmers from any distress sales.

To achieve the above mandate, CCI has created and maintaining adequate infrastructure facilities to meet any eventuality of heavy MSP operations to the extent of about 100 lakh bales valuing about Rs 30,000 crore. As on date CCI has about 700 regular employees and operating more than 400 procurement centres through a network of 17 branches in all 11 cotton growing states.

The Corporation is having paid up capital of Rs 25 crore and reserve and surplus of Rs 263.53 crore as on 31.03.2023. Thus, the total net worth of the corporation is Rs 288.53 crore as on 31st March 2023.

During last two years, farmers were getting higher prices above MSP rates by market forces itself. As a result, farmers did not require market intervention by CCI. Hence, procurement of cotton under MSP in FY2022-23 was nil.

Besides above, CCI has taken following initiatives to support Ease of Doing Business in a transparent manner:

⦁ In order to increase consumer trust as a reliable row material provider to textile industry, the Corporation is implementing Bale Identification and Traceability System (BITS) from the new cotton season w.e.f. 01/10/2023 for its’ all the stocks. Any buyer can trace the cotton origin, bale processing factory name, and other details by just scanning the unique QR code affixed on each bale. The application has been developed using latest state art of technologies with web and mobile applications and bale traceability is powered by Blockchain Network.

What is your current assessment of India’s textile industry? Are the government policies to boost the industry’s growth working on the ground? What else should the government do to propel growth?

India is the world’s second-largest producer of textiles and garments. It is also the sixth-largest exporter of textiles spanning apparel, home and technical products. India has a 4 per cent share of the global trade in textiles and apparel. However, India’s textile industry faces challenges related to competition, sustainability, circularity and compliance. However, it also offers growth opportunities in segments like sustainable textiles, technical textiles, and through e-commerce and exports.

Key end-user industries, such as apparel, automotive, construction, healthcare, and hospitality, continue to drive demand for textile products. It’s crucial for the industry to adapt to changing consumer preferences and global trends to remain competitive and sustainable.

Government of India is also working towards upliftment of technical and MMF textile companies by upscaling its infrastructure. 100 per cent FDI (automatic route) has been allowed in the Indian textile sector. Technical textiles have been grouped into 12 categories: Agrotech, Meditech, Mobiltech, Packtech, Sportech, Buildtech, Clothtech, Hometech, Protech, Geotech, Oekotech and Indutech. The Government has assigned 207 Harmonized System Nomenclature (HSN) to promote India’s technical textile industry. Besides, Amended Technology Upgradation Fund Scheme (ATUFS), National Technical Textiles Mission and Integrated Processing Development Scheme, Government of India has introduced a PLI scheme to establish seven integrated mega textile parks and boost textile manufacturing in the country.

Thus, the Indian textile industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand.

What is the global standing of the Indian textile industry?

India is one of the largest producers of textiles and garments globally with 4 per cent share in global trade of textiles and apparel. The fundamental strength of the textile industry in India is its strong production base of a wide range of fibre/yarns from natural fibres like cotton, jute, silk and wool to synthetic/man-made fibres like polyester, viscose, nylon and acrylic. Therefore, it has a vast and diverse textile industry, offering a wide range of products, from traditional hand-woven fabrics to modern, technologically advanced textiles to cater the need of various global market segments. Besides this, India enjoys a comparative advantage in terms of skilled manpower and in cost of production relative to other major textile producers. The textiles and apparel industry contribute 2.3 per cent to the country’s GDP, 13 per cent to industrial production and 12 per cent to exports.

In order to become more competitive globally, adopting automation, digitalisation, and sustainable manufacturing practices is crucial for domestic textile industry. Besides this, textile industry may also focus on the following aspects:

⦁ Training of work force in modern textile techniques, quality control, and sustainable practices can elevate the industry’s competitiveness.
⦁ Upgrading infrastructure, including transportation, logistics, and energy supply, can reduce production costs and improve e overall competitiveness.
⦁ Strengthening the entire supply chain from raw materials to finished products can reduce lead times and enhance responsiveness to market demands.
⦁ Focus on sustainability and eco-friendly practices to align with global trends. Consumers are increasingly demanding environmentally responsible products, so adopting sustainable practices can be a competitive advantage.
⦁ Reducing dependency on a few markets and diversifying export destinations can help mitigate risks associated with changes in global demand.
⦁ Leveraging trade agreements and participating in regional economic blocs can provide preferential market access and trade advantages.
⦁ Promoting Indian cotton and textile brands and highlighting the country’s rich textile heritage can enhance the perception of ‘Made in India’ products in global markets.

What kinds of trends are you seeing in the market at present?

Sustainability has been a growing concern in the cotton industry, with consumers increasingly demanding eco-friendly and ethically produced cotton.

In its long journey of more than five decades, CCI has been a major contributor for enhancing sustainability of cotton farmers & textile industry and branding of Indian cotton. It has geared up its infrastructure looking at the changing demand of the textile industry and to serve the cotton farmers in case market rates of kapas fall below MSP in cotton season 2023-24.

Being an initiator towards holistic planning for sustainability in the cotton, a pilot project starting from March 2023 till March 2024 is taken up by CCI in association with ICAR-CICR for creating awareness and extension services on ‘Best Farm Practices’ to Improve yield, quality and sustainability. CCI is also participating in a special project of Ministry of Agriculture in association with Ministry of Textiles through ICAR-CICR Nagpur with a budget outlay of Rs 41.87 crore under NFSM for targeting technologies such as High Density Planting System (HDPS), closer spacing and production technology for ELS cotton focusing on a cluster-based and value chain approach in Public Private Partnership (PPP) mode through Direct Benefit Transfer (DBT) to farmers.

To standardise the quality and branding of cotton, Government of India has initiated ‘Kasturi Cotton India’ project targeting Inspection, Testing, Certification and Traceability of Kasturi Cotton India tagged bales. In this regard, MoU has been signed between CCI on behalf of Govt. of India and TEXPROCIL for Traceability, Certification and Branding of KASTURI Cotton India with Corpus fund of Rs 30 crore by joint contribution of Industry and MoT over a period of 3 years during 2022-23 to 2024-25.

Looking at the demand of textile industry, CCI has taken initiative on improving traceability by implementing blockchain systems to provide buyer mills/exporters with information about the origin and quality processing of the cotton they are purchasing through e-Auction of CCI.

The digital transformation of the textile and apparel industry has altered the way cotton products are marketed and sold. CCI is also working to adapt by expanding its online presence and facilitating e-commerce for cotton supply chain.