Advocating free trade, the Cotton Association of India (CAI) has urged the government to remove the 11 per cent customs duty on the import of raw cotton. Presently, the import of raw cotton is duty free till December 31, 2025.
Making a case for duty removal, CAI President said the Indian textiles industry is passing through one of its worst times, reeling under the uncertainty of US tariffs and recessionary conditions in Europe.
“Current market challenges driven by lower domestic productivity and high minimum support price (MSP) have made the Indian cotton costly compared to other competing international growths. The 11 per cent import duty levied on cotton not only distorts the prices but also compounds the misery of our textile industry,” he said.
The only solution to improve textiles industry, Kotak said, was to make available sustainable and competitive supply of raw material. “While farmers are already protected through MSP, it is time to protect the textiles industry by removal of 11 per cent import duty, which makes it access competitive raw material. If textiles industry is not supported presently, it may immediately lead to unemployment, defaults in the loans and increase in bad debts in the entire textile value chain,” he said.
Removal of duty will help the Indian textiles sector to increase the share in the world trade and achieve the targeted $100 billion exports by 2030, the CAI President said.
Further, Kotak said that due to the unseasonal rains this cropping season, there has been a big damage to the quality of the Indian cotton. “Our textile mills will be compelled to import cotton to meet the quality requirement of buyers. If 11 per cent import duty is not removed, Indian textile goods will not be competitive and buyers will shift to Vietnam, Bangladesh, Pakistan and other markets. This can lead to long-term damage and loss of India’s share in the world cotton textile market,” he said.
The 11 per cent import duty was levied under special circumstances during the Covid-19 pandemic period. Before that there was no import duty on cotton and it had no adverse impact on farmers, he said.
“We from CAI strongly recommend to the government to give a helping hand and remove the present 11 per cent import duty on cotton for the survival of the entire cotton and textile value chain,” he added.
In its latest supply demand estimates, CAI has projected that the Indian cotton imports are likely to touch a record 50 lakh bales of 170 kg each for the current 2025-26 season, up from 41 lakh bales in the previous year. The crop is seen at 309.5 lakh bales and domestic consumption estimated at 295 lakh bales for the current season.
