India’s leading cotton trade organization has made a strong appeal for the immediate removal of the 11% import duty on raw cotton, highlighting the detrimental effects on the domestic textile industry. The Cotton Association of India (CAI) warns that high prices for Indian cotton and escalating minimum support prices (MSP) are eroding the sector’s competitiveness. While the government has temporarily permitted duty-free cotton imports until December 31, the industry insists that a permanent removal of this duty is essential.
The CAI stated that the textile industry is navigating one of its most difficult periods, with soaring domestic cotton prices preventing Indian mills from benefiting from free trade agreements (FTAs) with other nations.
Factors such as high MSP, low productivity, and rising input costs have rendered Indian cotton significantly more expensive than global alternatives. Consequently, mills struggle to compete with international suppliers, resulting in ongoing pressure on profits for both spinners and fabric manufacturers. The CAI emphasized that the 11% import duty, originally introduced during the COVID-19 pandemic, has outlived its necessity and is distorting the market landscape.
Moreover, the CAI cautioned that the distress within the industry is starting to affect cotton traders and ginners, leading to delayed payments and mounting bad debts throughout the value chain. The association insists that the only sustainable approach is to ensure access to competitively priced raw cotton, which requires an urgent removal of the import duty.
The statement also noted that India’s textile exports have been negatively impacted by global economic slowdowns and uncertainties in Europe. The CAI warned that if raw cotton imports become more expensive after December 2025, the repercussions could include rising unemployment, loan defaults, and increased financial strain across textile mills.
Moreover, the CAI linked the removal of import duties to the government’s broader objectives, citing that the Textile Ministry’s target of achieving $100 billion in textile and apparel exports by 2030 can only succeed if mills obtain raw materials at competitive prices. Historically, India maintained a zero import duty on cotton without any adverse effects on farmers.
The CAI pointed out that unusual seasonal rains this year have damaged cotton quality, forcing mills to depend more on imports. If the duty is not removed permanently, the association warned that buyers may migrate to rival manufacturing hubs such as Vietnam, Bangladesh, and Pakistan, potentially resulting in a long-term loss of India’s global market share.
CAI President Vinay N. Kotak called on the government to intervene swiftly, stating that the permanent removal of the 11% import duty is critical for the survival of the entire cotton and textile value chain. The association concluded that only by ensuring competitive access to raw cotton can India fully utilize FTAs, attract global orders, and bolster its position in the textile supply chain.
