India's Cotton Imports Skyrocket to Five-Year High in 2024-25
India's cotton imports reached a record high in the 2024-25 fiscal year (October-September), soaring to 4.13 million bales valued at Rs 11,989 crore. This represents a dramatic increase of nearly three times the volume imported in the previous year, marking the highest import level in five years, according to Union textiles minister Giriraj Singh. The data was presented in a written reply to the Lok Sabha on Tuesday, citing figures from the Directorate General of Commercial Intelligence and Statistics.
United States Emerges as Top Cotton Supplier to India
In 2024-25, the United States solidified its position as India's largest cotton supplier, exporting 8,56,000 bales. Brazil followed closely with 854,000 bales, and Australia contributed 849,000 bales. This trend underscores a significant shift from 2023-24, when Australia was the biggest exporter with 358,000 bales, and the US supplied 268,000 bales.
Over the past five years, the US has consistently been a major source of cotton for India, except in 2023-24. The historical data reveals:
- 2022-23: US exported 457,000 bales
- 2021-22: US exported 773,000 bales
- 2020-21: US exported 430,000 bales
Government Exempts Import Duty to Boost Textile Sector
Amid this surge in imports, the Union government implemented a strategic move by exempting an 11% import duty on cotton for the 2025-26 financial year. This exemption, effective from August 19, 2025, to December 31, 2025, included:
- 5% basic customs duty
- 5% agriculture infrastructure and development cess (AIDC)
- 1% social welfare surcharge
The duty was reinstated from January 1, 2026. This policy aims to ensure sufficient availability of quality raw material, support value addition, boost employment, and enhance exports, thereby generating higher indirect revenue for the economy.
Impact on Domestic Farmers and Government Measures
Farmers in Punjab have expressed concerns, stating that the duty exemption has led to lower cotton prices in the local market, exacerbating already precarious conditions. In response, the Cotton Corporation of India (CCI) has made purchases at the minimum support price (MSP) to mitigate the impact.
The government has reiterated its commitment to protecting cotton farmers by announcing MSP based on recommendations from the Commission for Agricultural Cost and Prices (CACP), along with state and central inputs and production costs. This ensures farmers receive a minimum of 1.5 times the cost of production (A2+FL) for their produce. The CCI actively undertakes procurement under MSP whenever market prices fall below this threshold.
For the 2025-26 cotton season, the CCI has opened 571 procurement centres across 149 districts in 11 cotton-growing states, procuring over 9,054,000 bales so far.
Parliamentary Inquiry and Broader Implications
Lok Sabha member G Kumar Naik raised several key questions regarding cotton imports, including:
- Details of cotton imported and top 10 importing countries over the last five years
- Whether import duties were exempted for the current financial year
- Assessment of the impact on domestic cotton farmers
- Measures to protect farmers while addressing textile industry needs
- Impact of duty exemption on government revenue
The government's reply highlights a balancing act between supporting the textile industry through duty exemptions and safeguarding farmer interests via MSP mechanisms. This dual approach aims to foster economic growth while ensuring agricultural sustainability in the cotton sector.
