The Future of Cotton Prices in Doubt; Read the Details
By jayesh chouhan 2025-12-16 11:43:57
Cotton Prices Face Uncertain Future
Domestic cotton prices have come under pressure this year after the central government temporarily removed the 11 percent import duty on cotton. Although this exemption is valid until December 31, concerns are growing among cotton farmers as the textile industry lobby is demanding an extension. (Cotton Market)
Cotton Market: Domestic cotton prices have come under pressure this year after the central government temporarily removed the 11 percent import duty on cotton. Although this exemption is valid until December 31, concerns are growing among cotton farmers as the textile industry lobby is demanding an extension.
Domestic cotton prices have come under pressure this year after the central government temporarily removed the 11 percent import duty on cotton. Although this exemption is currently valid until December 31, there is a growing demand from the textile industry lobby in South India to extend the deadline for the removal of the import duty. (Cotton Market)
However, experts are predicting that if this exemption continues, cotton farmers will face a serious crisis. (Cotton Market)
The textile industry argues that the import duty on cotton should be removed permanently so that micro, small, and medium-sized textile industries can get raw materials at cheaper rates and the gap between domestic and international market prices can be reduced. The Southern India Mills Association has directly questioned the central government, asking why there are restrictions on imports when production is insufficient to meet demand.
CAI also demands removal of import duty
The Cotton Association of India (CAI) has also demanded the complete removal of the import duty on cotton. The CAI has already claimed that low productivity and high Minimum Support Price (MSP) make domestic cotton expensive, making Indian cotton uncompetitive in the global market.
Pressure on prices in the open market
The combined effect of all these factors is visible in the open and private markets, and cotton prices have currently stabilized at around Rs 7,000 per quintal. Since this rate is approximately Rs 1,000 per quintal lower than the Minimum Support Price (MSP), farmers are approaching the Cotton Corporation of India (CCI) for purchases.
It is reported that more than 41 lakh cotton farmers across the country and over seven lakh in Maharashtra have registered through the 'Cotton Kisan' app.
Import at Zero Percent Tariff
The central government initially removed the 11 percent import duty on cotton from August 19 to September 30, 2025. Later, this period was extended to December 31, 2025. As a result, cotton is currently being imported into the country at zero percent import duty (tariff). According to experts, this decision has negatively impacted domestic cotton prices. Reasons cited by the Textile Industry
*The following reasons are being cited by the textile industry lobby: * Domestic cotton prices are higher compared to the international market.
* Due to a decline in domestic production, sufficient cotton is not available.
* The removal of import duty has made raw material cheaper.
* A record 50 lakh bales are expected to be imported in the 2025-26 season.
Uncertainty regarding Policy Meanwhile, there are indications that the central government's next decision will depend on the policy regarding cotton in the trade deal with the US. Accordingly, it will become clear whether cotton prices will rise or face further pressure.
Overall, the central government faces the major challenge of balancing the demands of the textile industry with the interests of the farmers, and cotton-growing farmers are closely watching the decision that will be made after December 31.
