Cotton Prices Decline After Centre Removes Import Duty
Domestic cotton prices have begun declining following the government’s decision to suspend the 11 percent import duty on cotton from June 1 to October 31, providing relief to spinning mills, textile manufacturers and exporters facing elevated raw material costs.
Market participants reported an immediate correction in cotton prices, with further moderation expected as imported cotton becomes available in the domestic market. The move comes after cotton prices had risen sharply over the past three months amid concerns over limited availability and stock accumulation.
The Cotton Corporation of India (CCI) reduced its cotton selling price by Rs 700 per candy to Rs 64,300 per candy, while yarn prices have also softened by around Rs 10 per kg, according to industry sources.
Industry bodies, including the Southern India Mills’ Association (SIMA) and the Tiruppur Exporters Association, had urged the government to remove the duty, arguing that higher domestic cotton costs were eroding the competitiveness of Indian textile exports against countries such as Bangladesh and Vietnam, which enjoy duty-free access to imported cotton.
Selvaraju, Secretary General of SIMA, said the market had responded positively to the policy decision, with cotton prices showing signs of easing and spinning mills being advised to pass on the benefit through lower yarn prices.
Exporters believe the duty suspension will improve raw material availability and help bring domestic cotton prices closer to international levels. Industry representatives also expect the move to reduce speculative stockholding and ease pressure on export-oriented manufacturers.
According to industry estimates, India’s share in global textile trade has remained around 4 per cent over the past two decades, while competing manufacturing hubs such as Bangladesh and Vietnam have steadily expanded their global presence.
The temporary duty suspension is expected to support the textile value chain by improving access to quality cotton, stabilising prices and enhancing export competitiveness during the coming months.
