An Estimation of Virtual Water Trade in the Indian Cotton Sector

Water is becoming progressively scarce resource and its availability varies with time and space. Agriculture is one of the sectors which is consuming enormous amount of water for production. Virtual water refers to the hidden or embodied form of water in the commodity. The international trade brings the virtual transfer of water between the countries. Cotton is high commercial profile crop cultivated in large spectrum of 12.35 million hectares in India accounting 37 per cent of world cotton area. The present study aims in determining virtual water trade of cotton in India for the period 2011-12 to 2019-20. The estimates showed that average Virtual Water Content of Indian Raw Cotton was 11786 m3/ ton. The Virtual Water Export of cotton fibre ranges from 76.06 Bm3 in 2011-12 to 24.17 Bm3 in 2019-20, whereas Virtual Water Import of cotton fibre was 2.66 Bm3 in 2011-12 increased to 17.21 Bm3 in 2019-20. Thus, Virtual Water Trade Balance of cotton fibre stands negative indicating India as Net Virtual Water Exporter of cotton. Changing rainfall coupled with climate change will significantly reduce water resource availability in the future. Hence to overcome negative virtual water balance, trade policies can be formulated by taking virtual water concept into consideration. It will make sense to plan for strategies like planning of crop allocation based on comparative advantage in location specific water requirement without compensating the growth associated with export earnings.