Textile industry wants 6-month extension for duty-free cotton imports

Pune: India's textile industry has demanded an extension of duty-free cotton imports by six months beyond October 31. The government had waived the import duty on cotton from June till October 31 to help the industry by increasing cotton availability and taming domestic prices.

Cotton prices have increased by about 20% in 2026, while the increase in cotton yarn prices is even higher. However, cotton farmers are worried that the extension of duty-free imports may suppress cotton prices when the new cotton crop arrivals start from the October harvest.

"We have requested the central government to extend the duty-free import window of raw cotton by six months as the cotton yarn prices have jumped 60% in 2026, adding to the challenges of the apparel exporters," said KM Subramanian, president, Tiruppur Exporters Association (TEA), a major hub of knitted garment exports from India.


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Cotton prices rose about 24 % in the last six months as India's cotton production declined by 2.35% to 290 lakh bales of 170 kg in 2025-26. India's cotton production has been declining for the last six years, contracting more than 17% since 2021-22.

The government had exempted the 11% import duty on raw cotton from June to October 31 to make cotton available at competitive rates to the Indian textile industry.

"Yarn cost accounts for about 60% of the raw material cost of garments. Along with price increases, we are also facing a shortage of yarn availability," said Subramanian. There are concerns about cotton production in the current year, which begins from October onwards.

"The rainfall situation is not good in cotton-producing areas like Vidarbha, Marathwada, Telangana and parts of Gujarat," said Pradip Jain, president, Khandesh Ginning and Pressing Association.

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Given the increase in input prices including fertilisers and seed, farmers are concerned about the possibility of extension of duty-free imports during the harvest period, as it can suppress domestic prices.

"Looking at the prevailing international cotton prices, imported cotton is not likely to be much cheaper than the domestic cotton. The domestic cotton prices may not fall below the current level of ₹9000/quintal. It will help to boost the availability of cotton for the industry," said Jain.

Indian textile and garment exporters have been trying to benefit from the Free Trade Agreement with the UK and increase their share in new export markets after the tariff war with the US adversely affected India's exports.