Demand to remove import duty on cotton from the government, know what is the purpose
The Cotton Production and Consumption Committee (COCPC) has recommended removing this duty or postponing it for at least six months. Some commentators have also said that the removal of duty can be used as a bargaining chip in the ongoing trade talks with the US. However, domestic cotton producers argue that the removal of duty may affect local prices.
India's textile sector is appealing to the government to remove 11 percent import duty on cotton. This appeal has been made due to severe shortage of raw material. The sector demands that if it has to remain internationally competitive, then it needs to be improved. According to some reports, due to this duty, domestic cotton prices have been consistently higher than global figures. Recently, cotton production in India has reached a 15-year low in 2024-25.
CITI can make an offer
The Confederation of Indian Textile Industry (CITI) says that the difference in prices makes it difficult for manufacturers to compete in export markets and threatens job security. India's textile industry has suggested that the government can offer to remove the 11 percent duty on raw cotton imports. It can be used as a tool to negotiate favorable terms for the country's textile and apparel sectors during bilateral trade talks with the US.
According to the Economic Times report, officials had earlier said that India was trying to build trade relations with the US. It was believed that due to the trade agreement, the US could consider reducing or completely eliminating import duty on walnuts, almonds, apples and cranberries.
Removal of duty will have an impact
However, the government advisory body, the Cotton Production and Consumption Committee (COCPC), has recommended removing this duty or suspending it for at least six months. Some commentators have also said that the removal of the duty could be used as a bargaining chip in the ongoing trade talks with the US. However, domestic cotton producers argue that the removal of the duty could impact local prices.
Ambitious export target
Experts say the duty benefits traders and multinational companies rather than farmers. According to the Economic Times, India's textiles ministry is generally supportive of it and emphasizes that affordable raw cotton is essential to achieve India's textile export targets. The sector aims to reach $100 billion in exports by 2030.
