Textile Industry Seeks Removal Of 11% Cotton Import Duty
The Southern India Mills Association (SIMA) and the Confederation of Indian Textile Industry (CITI) have jointly urged the government to permanently remove the 11% import duty on cotton, citing rising input costs and widening supply-demand gaps in India’s textile sector.
The recommendation follows a study titled Economic Analysis of Cotton Supply, Pricing and Trade Policy in India, prepared by Switzerland-based consultancy Gherzi, which highlights structural challenges in domestic cotton production and competitiveness.
Industry leaders noted that India has shifted from a surplus to a deficit cotton market in recent years, with domestic production estimated at around 290+ lakh bales against consumption exceeding 320+ lakh bales. Lower productivity around 500 kg per hectare compared to a global average of 800 kg and weather dependence have further constrained supply.
Ashwin Chandran said India’s export ambitions of US$ 100 billion in textiles by 2030 would require significantly higher cotton availability and sustained 15% annual industry growth. He stressed that the current import duty puts Indian mills at a disadvantage compared to competing Asian countries with duty-free cotton access.
Selvaraj warned that a shortage in cotton directly impacts employment across the textile value chain and supported the call for duty removal, stating that India’s cost of production remains high due to low yields and rain-dependent farming.
The study also recommended establishing a strategic cotton reserve and a price stabilisation mechanism to manage volatility. It suggested that the Cotton Corporation of India maintain buffer stocks and implement a dynamic selling strategy to support mills during peak demand periods.
The government is already implementing the Rs 5,659 crore Cotton Productivity Mission aimed at improving long-term yield and quality, though industry leaders said its benefits will take time to materialise.
The issue is currently under review by the Ministries of Textiles, Finance, and Agriculture, as policymakers weigh industry competitiveness against farmer protection concerns.
