The federal minister, singrash, said the temporary cotton export ban could continue to soar.
The statement comes as India's textile industry is suffering from the impact of soaring cotton and yarn prices, affecting production and exports.
Cotton prices doubled in less than a year to rs. 90000 per unit (355.62 kg). The price of some varieties of cotton even reached 100000 rupees per unit. The ban could help ease prices by increasing the supply of cotton in the domestic market.
The impact of high cotton prices on India's textile industry is particularly severe, as India relies heavily on cotton and, unlike other markets, man-made fibers account for a larger share.
Singh said cotton prices are unlikely to fall until the new crop goes on sale in October. Singh said cotton prices have been a "disincentive factor" and the problem is likely to persist for some time due to global cotton shortages.
The statement came a week after the government lifted tariffs on imported cotton (until September). Earlier, India's cotton import effective tax rate was 11%. "Cotton prices are not weakening or rising as we expected, but are stagnating at a point. We are evaluating further action. A temporary ban on exports or quantitative restrictions to control prices is an option."
"However, policy decisions should not be uncertain or subconscious responses, these are extreme measures, but we will do so if necessary," he added.
Textile manufacturers say many companies have to cut production because of rising input costs. Although consumers have taken on "a certain degree" of price increases, garment manufacturers are worried about resistance in the future.
Manufacturers say the import duty relief would be more beneficial if they supply the cotton immediately after the order is ordered. But from the date of placing an order, it will take nearly three months to get cotton. At present, the duty-free period is only September.