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Abstract
Cotton is an important fibre crop of India which plays a dominant role in
the country’s economy by meeting the domestic and export demands. It
contributes significantly to both agriculture and industry in terms of farm
income, employment and export earnings. India, despite being the third
largest producer of cotton in the world, has not exploited its potential to
emerge as a major player in the world raw cotton exports. The present level
of exports is not consistent and exhibits high variations in volume and
revenue earnings. In this paper, the dynamics of changes have been
measured in the export of raw cotton from India to different export markets
employing the Markov-Chain model. The results have shown China as the
sole stable destination for our cotton exports. The other traditional
importing countries such as Bangladesh, Germany, Indonesia, the UK,
Japan and Korea have recorded low retention probabilities during pre- and
post-economic reform periods, indicating unstable export share to
these markets.