Removing import duty on cotton could be confidence-booster.
By jayesh chouhan 2025-12-15 16:12:20
Removing Cotton Import Duty Could Boost Confidence
India's apex textile industry organisation, the Confederation of Indian Textile Industry (CITI), has said that at a time when the ongoing uncertainty surrounding the US tariff issue remains a major concern for India's textile and apparel sector, the removal of the import duty on cotton can act as a huge confidence-booster by ensuring a crucial raw material like cotton is available at internationally competitive prices.
CITI has stressed that the government should remove the 11 per cent import duty on all varieties of cotton to increase the global competitiveness of the country's textile and apparel sector. On August 28, the government had extended the import duty exemption on cotton to December 31, from the earlier announced September 30, 2025
CITI Chairman Shri Ashwin Chandran said, "The removal of import duty on cotton of all varieties will reduce the divergence between domestic and global prices and help restore the competitiveness of India's spinning and textile industries." He said the need for such a measure has also arisen in the backdrop of indications that cotton production may decline this year, and fibre quality is expected to deteriorate due to unseasonal rainfall increasing supply-side concerns.
"Such a step would also ensure that the minimum support price (MSP) and other farmer-support mechanisms can function as intended without creating significant downstream price distortions," the CITI Chairman added. During the current cotton season, the MSP of 'Kapas' has increased by nearly 8 per cent.
Incidentally, CITI, along with other industry bodies, has raised the issue of the removal of import duty on cotton at the stakeholder meeting held under the aegis of the Committee on Cotton Production and Consumption for the cotton season 2025-26 on December 8, 2025
During the last 10 cotton seasons, the average import of cotton in India has been about 2 million bales, which is around 6 per cent of the average production. Most imports cater to the specific requirements of specialised cotton or are linked to back-to-back arrangements by the industry with brands.
One of the biggest generators of jobs and livelihoods, the textile and apparel sector, is currently facing a huge headwind in the form of the 50 per cent US tariff, effective August 27, 2025. The US is the single-largest market for India's textile and apparel exports, contributing almost 28 per cent to the overall revenue of the country's textile and apparel exports India's textile and apparel exports to the US were valued at nearly $11 billion in the financial year 2024-25.
The impact of the 50 per cent US tariff has already been seen in India's export data for October 2025. The sharp drop in Indian textile and apparel exports in October 2025 is largely attributable to the high US tariff. Textile exports in October 2025 fell 12.92 per cent compared to October 2024 Apparel exports declined 12.88 per cent during the same period
The challenge for India's textile and apparel sector has been further enhanced by Mexico's recent decision to impose a 50 per cent tariff on Indian goods. India does not have an FTA with Mexico.
