India’s textile industry has intensified its demand for the
removal of the 11 percent import duty on cotton, arguing that
elevated raw material costs are hurting competitiveness at a
time when global demand remains uncertain and input pres
sures are rising.
A study released by the Confederation of Indian Textile Industry
(CITI) said the duty has made imported cotton expensive for
domestic mills, especially during periods of supply tightness,
and has pushed domestic cotton prices above international
benchmarks for the past few years.
According to the report, India’s cotton production is projected at
29.1 million bales in 2025–26, while domestic consumption is
estimated at 32.8 million bales, creating a supply gap of nearly
3.7 million bales. A similar deficit of 2.5 million bales was
recorded last year as consumption outpaced production.
Industry stakeholders said this mismatch has significantly
increased costs for spinning mills and exporters. Domestic
cotton prices have remained above the global Cotlook A Index
since 2024, reversing India’s earlier advantage of lower-priced
cotton compared to global markets.
The report warned that if this trend continues, India’s cotton
yarn exports could decline by 20–25 percent, potentially leading
to annual export losses of USD 0.5–1.2 billion, reported the
Economic Times.
The sector has also flagged weakening investment sentiment. Shipments of new ring spindles reportedly declined to around
900,000 units in 2024, compared with more than 2 million units
in both 2022 and 2023.
Nearly 14–15 million ring spindles, representing about 25
percent of India’s installed spinning capacity, are currently lying
idle due to poor margins and weak competitiveness.
Textile manufacturers have additionally been hit by rising yarn
prices. In major textile hubs such as Tirupur and Surat, yarn
prices have surged sharply in recent months due to higher
cotton costs, strong overseas demand, and increased processing
expenses. Fabric prices have already risen by Rs 10–25 per
metre in some segments.
The demand for duty relief has gained urgency amid disruptions
linked to the ongoing West Asia conflict, which has also
increased logistics costs and prices of petrochemical derivatives
used in synthetic fibres.
The Ministry of Textiles is reportedly examining temporary duty
reductions in consultation with the Finance and Agriculture
ministries.
At the same time, the Centre has approved a Rs 5,659 crore
Mission for Cotton Productivity aimed at improving yields,
quality and long-term domestic cotton availability.
While the industry has welcomed the move, it maintains that
immediate duty relief is needed to address short-term supply
shortages and restore export competitiveness.