The Confederation of Indian Textile Industry (CITI) has called on the government to remove the 11 per cent import duty on all varieties of cotton, arguing that the move is essential to safeguard the global competitiveness of India’s textile and apparel sector amid mounting external and domestic pressures.
Rationale Amid Trade Uncertainty
“At a time when the ongoing uncertainty surrounding the US tariff issue remains a major concern for India’s textile and apparel sector, the removal of the import duty on cotton can act as a huge confidence-booster by ensuring a crucial raw material like cotton is available at internationally competitive prices,” CITI said.
The government had earlier extended the exemption on cotton import duty until December 31, 2025, from the previously announced deadline of September 30.
Supply Concerns and Price Alignment
According to CITI, the case for removing the duty has strengthened due to indications of a possible decline in cotton output this season, along with concerns over fibre quality following unseasonal rainfall.
He noted, “The removal of import duty on cotton of all varieties will reduce the divergence between domestic and global prices and help restore the competitiveness of India’s spinning and textile industries.”
He added that such a measure would also allow the minimum support price (MSP) and other farmer-support mechanisms to operate as intended, without causing distortions in downstream prices.
The MSP for kapas has risen by nearly 8 per cent in the current cotton season.
Industry Engagement and Import Trends
The issue was raised by CITI and other industry bodies at a stakeholder meeting convened under the Committee on Cotton Production and Consumption for the 2025–26 cotton season on December 8.
Over the past decade, India’s average cotton imports have been about 2 million bales annually, accounting for roughly 6 per cent of average production. These imports largely cater to specialised cotton requirements or back-to-back arrangements linked to global brands.
Impact of Higher Tariffs on Exports
The US remains India’s largest market for textile and apparel exports, contributing nearly 28 per cent of export revenues. Shipments to the US were valued at about USD 11 billion in FY2024–25.
The impact of the higher tariff has already been reflected in export data. In October 2025, textile exports declined by 12.92 per cent year-on-year, while apparel exports fell by 12.88 per cent, a trend largely attributed to the elevated US tariff.
Sectoral challenges have been compounded by Mexico’s recent decision to impose a 50 per cent tariff on Indian goods, in the absence of a free trade agreement between the two countries.
Outlook
CITI maintains that removing the cotton import duty would be a timely intervention to ease cost pressures, stabilise raw material availability and help the sector navigate a challenging global trade environment.
