The Textile Ministry has pitched for a temporary removal or reduction in import duties on raw cotton to reduce input costs for apparel exporters amid the West Asia crisis, but the Agriculture Ministry is not yet ready to give its consent, sources said. 

In its discussions with the Revenue Department, the Textile Ministry assured that care would be taken to ensure that farmers are not hurt as duty cuts could be extended only during the lean season.

However, given raw cotton’s political and economic sensitivity, the Agriculture Ministry is treading cautiously and conducting multi-stakeholder consultations before making a final decision, a source tracking the matter told businessline.

“Now that the Revenue Department has decided that a decision on removing or reducing import duties on raw cotton will be taken only after the Agriculture Ministry’s consent, the matter could be long-drawn. The Textile Ministry will keep pushing for it as garments exports have taken a hit  because of the West Asia disruptions and could do with some assistance,” the source said.

Garments exporters have separately approached the Finance Ministry seeking relief in duties. In a submission to Finance Minister Nirmala Sitharaman, the Apparel Export Promotion Council noted that cotton prices have been rising steadily due to ongoing geo-political developments and supply-side constraints. “In Northern India, cotton prices have increased due to tight domestic supply. Limited stock availability with ginners and reduced arrivals have compelled mills to rely more heavily on auctions conducted by CCI,” the letter stated.

Most of the cotton has already moved out of farmers’ hands and is currently held by traders, leading to speculative practices in the market, it added. Rising yarn and fabric prices have spiked production costs, eroding the industry’s export competitiveness despite strong global demand.

“..we strongly urge your kind intervention for the immediate removal of customs duty on the import of raw cotton. This step will help stabilize prices and provide much-needed relief to the entire textile value chain,” the AEPC letter added.

While India is one of the world’s largest producers of cotton, it also imports from other countries to meet the demand during the lean summer months and also source some superior varieties not available locally.

India’s cotton output for the 2025–26 season has been revised upwards by by 3.50 lakh bales to 320.50 lakh bales of 170 kg by the Cotton Association of India (CAI), which indicates better crop prospects and stronger arrivals in key producing states including Gujarat. 

“Removal or reduction of import duties on cotton could affect the prospect of cotton farmers which would have economic as well as political implications. The Agriculture Ministry, therefore, weighs such decisions very carefully,” another source said.

On Thursday, Agriculture Minister Shivraj Singh Chouhan met garments exporters and officials from Ministries and Departments including his own, Commerce and Textiles, to examine the matter.

“The Textile Ministry is hoping that a decision on the issue is taken soon as garments exporters need immediate help. The Agriculture Ministry is non-committal right now,” the first source said.

The country’s textiles and garment exports fell 2.2 per cent to $35.8 billion in 2025-26 due to contraction in shipments of key segments such as cotton, per an analysis of the latest trade data by research body GTRI.

Published on April 30, 2026