India’s textile industry calls for duty-free cotton imports to stay export competitive

India’s textile and apparel industry is facing one of its most difficult periods in recent years. Export pressure from steep US tariffs, rising raw material costs, and supply-side uncertainty are all converging at the same time. Against this backdrop, the Confederation of Indian Textile Industry (CITI) believes one policy step could offer much-needed relief: removing the import duty on cotton.

Why cotton prices matter right now

Cotton remains the backbone of India’s textile value chain, especially for spinning and downstream apparel manufacturing. When domestic cotton prices move far above global levels, Indian yarn and fabric producers lose price competitiveness in export markets. This gap has widened in recent months, creating stress across mills that already operate on thin margins.

CITI has urged the government to remove the 11 per cent import duty on all varieties of cotton. The goal is simple, align domestic prices more closely with international rates and ensure uninterrupted access to quality raw material. According to the industry body, this step would help restore balance across the supply chain at a time when margins are under pressure.

Production concerns add to supply risks

This call for duty removal is not coming in isolation. Early indicators suggest that cotton output may decline in the current season. Unseasonal rainfall has also raised concerns over fibre quality, which could limit the availability of spinnable cotton for certain counts and applications.

CITI Chairman Shri Ashwin Chandran has pointed out that duty-free imports would ease these supply risks while reducing the price gap between domestic and global cotton. He also noted that such a move would allow farmer-support mechanisms, including the minimum support price, to function without causing downstream price distortions. During the current season, the MSP for kapas has already risen by nearly 8 per cent.

Imports play a targeted role, not a volume threat

Cotton imports are often misunderstood as a threat to domestic growers. Data from the past decade tells a different story. India’s average cotton import over the last ten seasons stands at around 2 million bales, roughly 6 per cent of total production.

Most of these imports serve specific needs extra-long staple cotton, specialised varieties, or back-to-back supply commitments tied to brand orders. Removing the duty would not flood the market but would give mills flexibility to meet quality and delivery requirements in global supply chains.

Tariffs from the US and Mexico deepen export pressure

The urgency of CITI’s request becomes clearer when viewed alongside recent trade developments. Since August 27, 2025, Indian textile and apparel exports to the US have faced a 50 per cent tariff. The US remains India’s largest export market, accounting for nearly 28 per cent of total textile and apparel export revenue. Shipments to the US were valued at close to $11 billion in FY 2024–25.

The impact is already visible. In October 2025, textile exports dropped by 12.92 per cent compared to the same month last year, while apparel exports declined by 12.88 per cent. Industry data suggests the higher US tariff played a major role in this slowdown.

Pressure has increased further with Mexico imposing a 50 per cent tariff on Indian goods. With no free trade agreement in place, Indian exporters now face higher barriers in yet another key market.

A confidence signal the industry is waiting for

Textiles and apparel remain one of India’s largest employment-generating sectors. When export demand weakens, the effects ripple quickly through spinning, processing, garmenting, and allied services. Lower raw material costs cannot solve every challenge, but they can provide breathing space.

CITI raised the issue of cotton import duty removal at the stakeholder meeting of the Committee on Cotton Production and Consumption for the 2025–26 season, held on December 8, 2025. For the industry, this step is seen as a practical confidence signal, one that helps mills stay cost-competitive while navigating an increasingly difficult global trade environment.

As tariff pressures persist and supply risks remain, access to globally priced cotton could make the difference between holding export orders and losing them to competing countries.