The performance of Indian cotton exports to China is better than the United States, according to a latest report of the United States Department of Agriculture.

"Since becoming a significant exporter last year, with cheaper freight rates and lower cost of production, India has consistently under-priced US cotton to Far East ports like China. That price differential swelled to a high of 32 dollar per bale in January 2007," the report said.

Low prices and large exportable stock have made India a major exporter in this field, the report said.

India exported around 25 per cent cotton during 2006-07 and it is estimated nearly 62 per cent exported to China.

India's cotton production has almost increased in the past five years and following it, cotton exports have also gone up, the report added.

In contrast, US cotton exports are expected to decline by 28 per cent to 13 million bales this year from 18 million bales last year with less demand overseas.

"Continuation of that price relationship could make the US more competitive in world markets, vis-a-vis India, in the future," USDA said.