Relief for Exporters, but Dispute Over Cotton Import Duty
By yash chouhan 2026-05-01 12:58:45
Difference on cotton import duty reduction: Textile Ministry, Agriculture Ministry cautious in favor of giving relief to exporters
Differences have emerged within the central government regarding reduction in import duty on raw cotton. While the Textiles Ministry is supporting reduction or removal of duty to provide relief to apparel exporters, the Agriculture Ministry is currently not agreeing to this proposal keeping in mind the interests of farmers. The ongoing geopolitical crisis in West Asia has increased costs for exporters, affecting their competitiveness.
The Textiles Ministry argues that the temporary cut in import duty will reduce the cost of raw materials and boost exports. The ministry has also assured that this step will be taken only in off-season, so that domestic farmers are not negatively impacted. Despite this, the Agriculture Ministry is adopting a cautious approach considering this issue as economically and politically sensitive and wants to take decisions only after extensive consultation.
The Revenue Department has also clarified that the consent of the Agriculture Ministry will be mandatory for any change in import duty, which may slow down the decision process. Meanwhile, the Apparel Export Promotion Council has sought intervention from the Finance Ministry, saying cotton prices are continuously rising due to supply shortage, especially in North India. Mills now have to depend more on the auctions of Cotton Corporation of India.
Exporters say that the cost of production is increasing due to increased speculation in the market and increase in prices of yarn and fabric. Due to this, despite strong global demand, the competitiveness of Indian exporters is weakening. He has appealed to the government to immediately remove the import duty.
Although India is one of the major cotton producers, there is still a need for imports in the off-season. The production estimate for 2025-26 is 320.50 lakh bales, but balancing the interests of both farmers and industry in policy decisions remains a major challenge.
