As domestic cotton prices continue to rise tracking global clues, a worried textile industry has urged the government to allow the duty-free imports of the fibre crop to safeguard the export competitiveness and stabilise the value chain.

Cotton prices have been climbing steadily in recent weeks, putting pressure across the textile ecosystem -- from spinning mills to garment exporters.

Industry stakeholders warn that the sustained price surge is eroding margins, particularly for exporters operating on long-term contracts with limited flexibility to absorb input cost increases.

“Cotton price increase will definitely affect the whole value chain because it is rising steeply day by day,” said K Selvaraju, Secretary General of The Southern India Mills Association (SIMA), highlighting that garments, which rely on fabric inputs, are especially vulnerable due to the absence of sufficient price cushioning.

Facing headwinds

The timing of the cotton price rally is particularly challenging as the India’s textile exports are already facing headwinds due to geopolitical disruptions, including the ongoing tensions in West Asia that have affected demand in key markets. While yarn exports have remained relatively stable - supported by demand from China - the broader export segment is under strain.

Spinning mills, for now, have managed to sustain operations despite elevated cotton prices. However, if the trend continues, even this segment could face disruptions, Selvaraju said, adding that there was a dearth of quality cotton in the country. The untimely rains last year had damaged more than half the cotton crop resulting in quality issues. As a result, the mills are not only grappling with tight supplies but also limited availability of quality cotton.

Selvaraju said the cotton production is around 290 lakh bales, lower than the domestic requirement of around 330 lakh bales. To bridge the gap, the industry is calling for the removal of the 11 per cent import duty on cotton from May till October, a window that would cover the lean supply period before the fresh arrivals begin.

No stocks with farmers

Selvaraju said such a move would not adversely impact farmers, as most of the domestic crop is typically sold by the end of March. “Farmers do not hold cotton stocks beyond March 31. So, a temporary duty exemption will not hurt them,” he said.

The government had allowed duty-free imports until December 31, 2025, enabling imports of around 30 lakh bales, with an additional 7 lakh bales coming in under the advance authorisation. “Despite this, we need at least another 30 lakh bales this year to avoid the shortage,” he said.

With April already over, the industry is pressing for an immediate decision, arguing that a delay in duty relief could further tighten supplies and amplify price volatility in the months ahead.

Published on April 21, 2026