Import Duty Exemption on Cotton Reduces Costs for Textile Industry: Minister
By jayesh chouhan 2025-12-20 11:47:07
Cotton Import Duty Exemption Lowers Textile Costs
*New Delhi:* (IANS) The exemption of the 11 percent import duty on cotton has led to a softening of domestic prices, which are currently between Rs 51,500 and Rs 52,500 per candy, ensuring affordable prices for the textile industry, while MSP-based support will continue to protect farmers, Parliament was informed on Friday. Minister of State for Textiles, Pavithra Margerita, said in a written reply to a question in the Rajya Sabha that since the duty exemption, international prices equivalent to S-6 cotton have decreased from approximately 79.15 US cents per pound before August 19, 2025, to approximately 73.95 US cents per pound in December 2025, indicating a downward trend in global prices.
Domestic cotton prices have also decreased accordingly from approximately Rs 57,000 per candy to approximately Rs 52,500 per candy, broadly in line with the fluctuations in international prices. She said that domestic prices are influenced by global and domestic demand-supply situations, exchange rates, and quality considerations, while cotton imports during the 2024-25 season constituted approximately 13.93 percent of the total domestic consumption. Margerita added that the government supports cotton farmers through the Minimum Support Price (MSP) system, which provides a return of at least 50 percent over the cost of production. For the 2025-26 season, the MSP for medium staple cotton has been fixed at Rs 7,710 per quintal and for long staple cotton at Rs 8,110 per quintal, which is Rs 589 per quintal higher than in 2024-25. To prevent distress sales, the Cotton Corporation of India (CCI) has procured approximately 31.19 lakh bales of cotton worth ₹13,492 crore under Minimum Support Price (MSP) operations through 570 procurement centers across 149 districts in 11 states as of December 11, 2025. The minister stated that cotton imports from the USA have increased to meet the quality and supply requirements of the domestic textile industry, which consumes approximately 94 percent of India's cotton.
During August-September 2025, including the period after the temporary waiver of the 11 percent import duty, imports from the US were aligned with industry requirements. Overall, cotton imports into India increased from 15.20 lakh bales in 2023-24 to 41.40 lakh bales in 2024-25, helping to bridge the demand-supply gap. The minister explained that these imports ensure the availability of specific cotton varieties and support export-oriented production, thereby enhancing the global competitiveness of India's textile sector.
The CCI procures cotton under the MSP scheme to ensure fair prices for farmers. He further added that MSP operations are continuing to protect farmers from price fluctuations and ensure remunerative returns.
