Cotton import duty waiver proposal faces stiff opposition from advocacy groups

The government is faced with a high-stakes policy deliberation regarding the potential removal of the 11 per cent customs duty on raw cotton imports. As of late May 2026, various ministries are in advanced consultations to determine if a waiver is viable to support a textile industry facing a projected supply-demand gap of approximately 45 lakh bales for the 2025-26 season. Apparel exporters and spinning mill associations have intensified their advocacy for this relief, arguing that the limited availability of quality domestic fiber and rising input costs are eroding India’s competitive standing in global markets.

However, the proposal has faced stiff resistance from political and farming advocacy groups, including the Communist Party of India (CPI). Critics contend, duty-free imports could flood the market, suppressing domestic prices and repeating the fiscal distress witnessed in 2025, when market rates reportedly fell significantly below the Minimum Support Price. With the government hiking the MSP for cotton to Rs 8,267 per quintal for the MY26-27 to incentivize sowing, officials must reconcile the textile sector's urgent need for cost-efficient raw materials with the imperative to ensure remunerative price floors for domestic growers.

The Cotton Association of India (CAI) is the premier national body representing the cotton trade. It provides critical market data, including production forecasts and consumption trends, and plays a central role in advocating for policies that maintain a balance between the agricultural sector and the downstream textile manufacturing value chain.