Relief on Cotton Duty: A Welcome Move, but the Textile Industry's Real Challenges Remain
The Government of India has decided to grant a temporary exemption on the 11% customs duty on cotton imports from June 1 to October 31, 2026. The government states that this move will ensure an adequate supply of raw material for the textile industry, reduce input costs, provide relief to MSME units, and make Indian textile products more competitive in the global market.
According to Union Textiles Minister Giriraj Singh, this decision aims to ensure cotton availability during the off-season and boost exports. Industry bodies believe this exemption could lower cotton prices by approximately 6%, offering relief to companies manufacturing yarn, garments, towels, bedsheets, and home textiles.
However, experts point out that this is merely a temporary solution. The real challenges facing the Indian textile industry include low cotton productivity, quality issues, and global competition. According to the Confederation of Indian Textile Industry (CITI), India imports an average of about 2 million (20 lakh) bales of cotton annually, representing roughly 7% of total domestic production. These imports are primarily undertaken to secure superior quality yarn and fulfill export orders.
Industry stakeholders note that countries like Bangladesh, Vietnam, Indonesia, and Pakistan impose no duty on cotton imports. In contrast, the 11% import duty levied on Indian mills increases costs and hampers export competitiveness. India has also witnessed a decline in its share of global cotton yarn exports in recent years.
Experts observe that India's average cotton productivity stands at 450–500 kg per hectare, whereas the global average is around 800 kg per hectare. Furthermore, fiber quality and contamination remain significant issues. They argue that providing duty relief alone will not yield a long-term solution. To strengthen the Indian textile industry, equal emphasis must be placed on superior seeds, modern farming practices, high-quality cotton, supply chain improvements, and enhancing productivity. Only then will India be able to maintain its competitive edge in the global textile market.
