* India's 2012/13 cotton output seen 7 pct down

* Higher local prices may spur raw cotton imports (Adds details, background)

By Deepak Sharma

MUMBAI, Jan 23 (Reuters) - India's raw cotton exports are expected to fall 38 percent to 8 million bales in the year beginning October 2012, a government official said on Wednesday, as China, the biggest buyer, resorts to largescale imports of cotton yarn.

Hefty import taxes on raw cotton have forced textile mills in China to buy value-added cotton yarn from Bangladesh and some southeast Asian countries.

Along with Bangladesh and some southeast Asian countries, India is also supplying cotton yarn to China, which emerged as New Delhi's biggest buyer of raw cotton in the year to Sept. 30, when India shipped out a record 12.9 million bales.

Raw cotton exports to China have slowed down since then, with December exports registering a drop of more than 64 percent to 787,00 bales year-on-year, traders said.

But cotton yarn exports to China have risen significantly and the country is likely to buy more, Textile Commissioner A.B. Joshi told reporters after a meeting of the state-run Cotton Advisory Board (CAB).

So far traders have registered 3.5 million bales of raw cotton for exports and have already shipped out 2.4 million bales, Joshi said.

The CAB also revised its 2012/13 cotton output forecast to 33 million bales, down from a record 35.5 million bales in the previous year, as late rains hit planting in the top producing Gujarat state.

A Reuters poll of 10 traders pegged the 2012/13 output at 34 million bales, down 3.7 percent from last year.

Joshi also said higher prices in India might encourage some traders to import raw cotton from neighbouring Pakistan. Imports might total 2 million bales this year, he said.