Cotton spinners’ revenues decline by 4-6 per cent in December 2025

The Indian cotton spinning industry is navigating a high-pressure environment as of late December 2025, with annual revenues projected to decline by 4 per cent–6 per cent. This downturn is largely the result of a ‘trickle-down effect’ from aggressive US trade policies, specifically the 50 per cent reciprocal tariffs on Indian-made garments. These levies have forced downstream apparel exporters to provide significant price concessions to maintain their presence in North American retail markets. Consequently, these costs are being absorbed across the value chain, causing cotton yarn realizations to slide from an average of Rs 103 per kg in H1,FY26  to approximately Rs 96–Rs 98 per kg this month. Market analysts at ICRA indicate, while domestic demand remains stable, the industry must prepare for a margin contraction of 50–100 basis points in H2,FY26.

Despite these headwinds, the sector is finding temporary relief through proactive government interventions. The extension of the import duty exemption on raw cotton through December 31, 2025, has successfully moderated input costs, offering a critical buffer for spinning mills. Furthermore, the relaxation of Quality Control Orders on man-made fibers has allowed blended yarn manufacturers to remain competitive against cheaper imports. While capital expenditure remains restricted to cost-saving measures like solar and wind power generation, the industry is increasingly looking toward market diversification. With 100 per cent land acquisition recently completed for seven PM MITRA mega textile parks, the long-term strategy focuses on creating an integrated, ‘farm-to-fashion’ ecosystem that reduces reliance on any single export destination.

The Indian cotton spinning industry comprises over 3,000 organized mills, primarily serving major apparel hubs in Bangladesh, Vietnam, and the US. Following a modest recovery in FY25, the sector currently prioritizes operational deleveraging and sustainable manufacturing. Leading players are expanding into organic and recycled yarn segments to align with evolving global environmental regulations.