India is understood to have told Pakistan that it is ready to lift the ban on cotton exports if the latter resumes its onion exports through rail and land routes.

Official sources in the Commerce Ministry said this was conveyed to Islamabad by the External Affairs Ministry. “The Indian side has conveyed to the Pakistani counterparts that it was ready to revisit the cotton export ban and ceiling issues, if the gesture is reciprocated by Pakistan through the removal of the ban on the movement of onion,” a senior official said.

On January 6, Pakistan banned onion exports to India by land. This pushed up onion prices once again to the Rs.60-70-a-kg range. Around 300 trucks carrying 3,000 tonnes of onion to India had reached Wagah near Amritsar, but were not allowed to cross the border.

Union Commerce and Industry Minister Anand Sharma termed the ban shocking and said the issue would be taken up with Islamabad.

Pakistan's textile industry has been badly hit by the suspension of cotton exports by India. It sought to import nearly one million cotton bales from India to sustain its order books and cool the domestic prices. Pakistani traders hoped to tide over the shortage by importing cotton between November and January, but India's Textiles Commissioner, who controls export and import of the commodity, suspended fresh registrations for exports.

Cotton price in Pakistan has peaked to 7,600 Pakistani rupees a maund (a bale of 37.32 kg). The flash floods in August and September displaced millions of people and submerged more than one million acres of fertile land. The areas in south Punjab and interior Sindh, which together produce the largest amount of cotton, were the most affected.

India opened registration for cotton exports of up to 2.5 million bales on December 31 last. It plans to export 2.5 million bales by February 25, since prices have almost doubled in the international market within a year. Of the 5.5 million bales of surplus, 3 million bales have already been exported. An Indian bale weighs 375 pounds or 170 kg.

“Now we are waiting for a positive response from the Pakistani side, and we could have a second look at the cotton export ceiling and ban to ease the situation there,” the official said.

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