CITI seeks permanent removal of import duty on cotton

A Confederation of Indian Textile Industry (CITI) delegation comprising leading lights of the textile and apparel industry met the Union Minister of Agriculture & Farmers’ Welfare, Shivraj Singh Chouhan, in Delhi on January 9, 2026, to seek his intervention regarding the permanent removal of import duty on cotton of all varieties.

The delegation informed the Minister about the industry’s apprehensions concerning the reinstatement of the cotton import duty from January 1, 2026, and its adverse impact on the competitiveness of the country’s textile and apparel sector.

In response, the Minister assured the group that these concerns would be carefully considered during the review process.

In their representation, the industry delegates highlighted that cotton production in India has been steadily decreasing and is projected to fall this year to its lowest level in the last two decades, heightening concerns about supply shortages. The reimposition of cotton import duty would further aggravate the cost pressure for companies, CITI said in a release.

The industry members pointed out that during the last decade, average cotton imports have been around 20 lakh bales, constituting around 6.8 per cent of India’s average domestic production. Further, imports are largely quality and specification-driven, catering to specialised cotton requirements and back-to-back export orders, and do not displace domestic cotton.

Further, they pointed out that while India is a large cotton producer, the availability of contamination-free and specialised cotton required for high-value and export-oriented textiles remains limited, necessitating selective imports. More significantly, after the imposition of the import duty on cotton, there has been a consistent premium on domestic cotton prices compared to international benchmarks in the form of import price parity, which has increased raw material costs for spinners and textile manufacturers, eroding competitiveness across the value chain.

Besides, major competing textile exporting countries such as Bangladesh and Vietnam have allowed duty-free access to cotton, giving them a structural cost advantage.

The industry delegates categorically stated that the textile industry fully supports the government’s objective of protecting farmers' interests, which are already effectively safeguarded through the Minimum Support Price (MSP) mechanism. The MSP for cotton has been increased by about 8 per cent in the current season and is currently above prevailing market prices, ensuring a strong safety net for farmers, even as the industry grapples with rising input costs and severe external trade headwinds.

One of the biggest generators of jobs and livelihoods, the textile and apparel sector is currently facing a significant challenge in the form of the 50 per cent US tariff, effective August 27, 2025. India’s textile exports, including those to the US, are dominated by cotton. The US is the single-largest market for India’s textile and apparel exports, contributing almost 28 per cent to the overall revenue of the country’s textile and apparel exporters.

India’s textile and apparel exports to the US were valued at nearly $11 billion in the financial year 2024-25.

ALCHEMPro News Desk (HU)