A study released by the Confederation of Indian Textile Industry (CITI) has called for the complete removal of import duty on cotton. The study, titled “Economic Analysis of Cotton Supply, Pricing and Trade Policy in India,” highlights the negative impact of the 11% import duty on cotton. It emphasizes the need for predictable access to imported cotton during supply gaps to maintain the long-term competitiveness of India's textile and apparel sector.
Key Findings of the Study
The import duty on cotton was temporarily waived from August to December 2025 and reinstated on January 1, 2026. Since its implementation in 2021, the duty has been temporarily waived twice. The study, jointly prepared by Gherzi and the International Cotton Advisory Committee (ICAC), notes that competitors such as Sri Lanka, Bangladesh, Vietnam, and Pakistan do not have similar restrictions. The industry demands a complete removal of the duty to level the playing field.
Proposed Strategic Reserve
The study suggests creating a strategic reserve for cotton, similar to the one established in China long ago. It also reveals that textile and apparel exports have declined by 2.2% in dollar terms year-on-year to $35.79 billion in fiscal year 2026.
During a media briefing in Coimbatore on Thursday, CITI chairman Ashwin Chandran stated, “The Gherzi-ICAC report presents a detailed and implementable roadmap for stakeholders to realise the ambitious $350 billion target for the textile and apparel industry by 2030.”
Challenges Facing the Industry
Dr. K Selvaraju, secretary general of the Southern India Mills' Association (SIMA), told reporters that cotton cultivation has declined by 20% over the last three years. India has the lowest yields among major cotton-producing countries. “To achieve the 2030 target, there must be a 15% year-on-year growth, for which these recommendations are required. But if the current situation continues, achieving it is not possible. The West Asia war has also led to an increase in freight and logistics costs, a gas shortage, a price hike of oil-based raw materials, and a price hike in dye and chemicals, all of which have impacted the textile and apparel industry,” he said.
