India’s cotton textile industry has received a major boost as the Government of India announced a temporary exemption of the 11% import duty on cotton from June 1, 2026, to October 31, 2026. The move comes in response to concerns raised by the textile sector over a significant cotton supply shortfall and rising raw material costs that have impacted the competitiveness of Indian textile manufacturers and exporters.The Southern India Mills’ Association (SIMA) has welcomed the decision, describing it as a much-needed relief for the entire cotton textile value chain, which has been under pressure due to escalating cotton prices and limited domestic availability.
Industry Faces Cotton Supply Deficit
India’s predominantly cotton-based textile industry is expected to face a shortage of 50–70 lakh bales during the current cotton season. While the estimated cotton crop stands at around 290 lakh bales, industry demand is projected to reach 330–340 lakh bales, creating a substantial gap between supply and consumption.The shortage has contributed to a sharp rise in domestic cotton prices over the past two months. Cotton prices surged from approximately ₹54,500 per candy (355 kg) to ₹71,000 per candy, significantly increasing production costs for spinning mills, textile manufacturers, and exporters.Although prices have started to soften in recent weeks, industry stakeholders have been seeking immediate government intervention to stabilize the market and ensure uninterrupted availability of raw materials.
Government Responds to Industry Demand
The temporary import duty exemption follows similar measures implemented during April–October 2022 and August–December 2025, which helped ease supply pressures and moderate cotton prices.By removing the 11% import duty, the government aims to facilitate the import of cotton at competitive international prices, helping domestic mills bridge the supply gap and maintain production continuity.
SIMA Appreciates Government Support
In a statement, Mr. Durai Palanisamy, Chairman of SIMA, expressed gratitude to the Government of India for addressing the industry’s concerns.He thanked Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman, Agriculture Minister Shivraj Singh Chouhan, Commerce and Industry Minister Piyush Goyal, and Textiles Minister Giriraj Singh for granting the temporary relief.According to Mr. Palanisamy, the exemption will help textile exporters meet international commitments, improve competitiveness in global markets, and support the sustainability of the cotton textile value chain.
Tamil Nadu Government’s Role Recognized
SIMA also acknowledged the support of Tamil Nadu Chief Minister C. Joseph Vijay, who reportedly sent a recommendation letter urging the central government to remove the cotton import duty.The association noted that the state government’s intervention played an important role in highlighting the industry’s challenges and the urgent need for corrective measures.
Industry Expects Market Stabilization
With duty-free cotton imports now permitted until the end of October, textile manufacturers expect domestic cotton prices to align more closely with international benchmarks.Industry leaders believe the move will create a more level playing field, improve raw material availability, and support India’s position as a leading global textile and apparel exporter.As the sector navigates ongoing market challenges, the temporary exemption is expected to provide immediate relief while helping maintain production efficiency, export competitiveness, and employment across the textile value chain.