MSP Hike on Cotton Raises Cost Concerns for Gujarat Textile Sector

Gujarat Textile Industry Raises Concerns Over Cotton MSP Hike

Ahmedabad: The recent increase in the minimum support price (MSP) for kapas (raw cotton) by the central government has raised concerns within Gujarat’s textile industry. While the move aims to support farmers, industry stakeholders fear that rising raw material costs could impact India’s competitiveness in global markets.

The revised MSP has been increased across all categories—medium staple cotton to ₹7,560 per quintal, medium-long staple to ₹7,860, long staple to ₹8,110, and extra-long staple to ₹9,310 per quintal.

Industry leaders believe that improving cotton productivity would be a more sustainable solution for enhancing farmers’ incomes without burdening manufacturers. They point out that although India accounts for about 37% of global cotton acreage, its share in production is only around 23%, indicating significant scope for yield improvement.

Textile manufacturers have also reiterated their demand for the removal of import duties on cotton. They argue that Indian cotton is currently among the most expensive globally, which is affecting export competitiveness, especially at a time when global buyers are looking at India as an alternative sourcing destination.

Market experts note that the revised MSP structure could encourage farmers to bring better-quality cotton to the market, particularly with pricing linked to quality parameters like moisture content. Increased sowing activity and higher arrivals may help farmers realise improved returns.

However, concerns remain that persistently high cotton prices could put additional pressure on spinning mills and yarn manufacturers, who are already facing weak demand and shrinking profit margins.

Industry stakeholders have urged the government to strike a balance between farmer support and industry sustainability by focusing on productivity improvements, reducing import duties, and easing logistics costs.

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