Cotton import increased due to trade deal, farmers in trouble, slight relief in textile sector
By yash chouhan 2026-02-09 13:02:51
Trade deal will increase cotton imports! Farmers in crisis and signs of recovery in textile industry
Nagpur: Due to India-America 'trade deal', efforts have started to eliminate 11 percent import duty on cotton. Already, cotton imports are continuously increasing, while exports are decreasing. With this deal, import of cotton from America will increase and the price of cotton in the domestic market will come under pressure and farmers will have to suffer financial losses. The Indian textile industry, which exports very little, will benefit from the deal as it will get cotton at cheaper prices.
The Indian textile industry requires 315 to 320 lakh bales of cotton every year to meet the export and domestic demand of textiles. Every year 330 to 340 lakh bales of cotton are produced in India. India requires 12 to 15 lakh bales of extra long yarn cotton to produce premium quality textiles.
The production of this cotton is 3 to 4 lakh bales and every year 10 to 12 lakh bales have to be imported. India has the largest production of long and medium yarn cotton. Since cotton prices in the global market are lower than in India, Indian textile industries import long yarn cotton in the name of extra long yarn and reduce the price. If the cotton price falls below the MSP, the government purchases 22-27 per cent of the total cotton production at the MSP rate. Farmers will be hit the hardest by duty-free cotton imports due to the 'trade agreement'.
India's textile exports
China ranks first in textile exports in the world market, while India ranks sixth. India's textile export share is only four percent. 25 to 30 percent of this cloth is exported to America. The European Union, Vietnam, Bangladesh and Türkiye are India's major competitors.
How does the textile industry benefit?
The rate of rupee in the year 2021-22 was Rs 1 lakh 5 thousand. Therefore, the prices of clothes increased in the year 2022-23. Rupee prices declined by 40 per cent in 2022-23 to reach a surplus of Rs 62,000. However, the industries did not reduce the rates of clothes by 40 percent. At present the rates of cotton are between 55 to 57 thousand rupees and the rates of clothes are between 1 lakh rupees.
A missed opportunity for India in Vietnam
There is huge demand for Bangladeshi clothes in the world. Bangladesh's textile industry is dependent on Indian cotton.
Due to political instability, Bangladesh's position in the global textile market faltered and India got an opportunity to gain its customers. Vietnam seized this opportunity as the Indian government ignored it.
