The Cotton Association of India (CAI) has called on the government to immediately remove the 11% customs duty on raw cotton imports, citing severe stress across the textile value chain.
India’s textile sector—one of the country’s largest employers and a major contributor to exports and rural livelihoods—is currently facing some of its most challenging conditions. Lower domestic productivity, higher minimum support prices (MSP), and global market pressures have made Indian cotton significantly more expensive compared to international varieties. According to CAI, the import duty has further distorted prices and intensified financial strain for textile mills, traders, and ginners.
The association said that while MSP operations already protect farmers, the textile industry now needs similar support through access to competitively priced raw material. With uncertainty over US tariffs and recessionary trends in Europe, CAI warned that continued pressure could lead to job losses, rising loan defaults, and increased bad debts across the sector.
CAI noted ongoing efforts by Commerce Minister Piyush Goyal and the central government to secure favourable trade agreements, including progress on FTAs and potential tariff resolutions with the US. These developments, combined with global sourcing shifts driven by “China Plus One” strategies and instability in Bangladesh, create opportunities for India—provided the industry can access affordable cotton.
The association also emphasised that the government’s target of reaching US$100 billion in textile exports by 2030 is achievable only if manufacturers have access to competitive raw materials. It added that the 11% duty, introduced during the COVID-19 pandemic, had not existed earlier and had never harmed farmers.
Damage to crop quality due to unseasonal rains this season means many mills will need to import cotton to meet buyer specifications. CAI cautioned that without duty removal, Indian textile products may lose competitiveness, leading buyers to shift orders to Vietnam, Bangladesh, Pakistan, and other markets—potentially causing long-term erosion of India’s global market share.
In its appeal, CAI stated: the removal of the 11% import duty is essential for the survival of the entire cotton and textile value chain.