Cotton supply deficit threatens Indian textile export competitiveness

India’s textile sector is facing a precarious supply-demand imbalance as domestic cotton production for the 2026-27 season is projected at 291 lakh bales against a consumption requirement of 328 lakh bales. This 37-lakh-bale deficit has become a focal point for industry leaders, who warn, the resulting raw material inflation is eroding the international competitiveness of Indian apparel exports. With data from the Cotton Textiles Export Promotion Council (CITI) indicating a 11.66 per cent Y-o-Y decline in apparel exports as of April 2026, manufacturers are increasingly hesitant to accept fresh orders due to the prevailing cost uncertainty.

The industry is currently lobbying for the urgent removal of 11 per cent import duty on raw cotton to bridge this supply gap and reducing the inflationary pressure on production costs. K Venkatachalam, Tamil Nadu Spinning Mills Association cautions, the situation is aggravated by speculative hoarding, and the actual market shortage is even more acute than official figures suggest. As lead times for international cotton shipments average 45 days, stakeholders emphasize, governmental intervention must be immediate to avert a severe production bottleneck in August. The standoff highlights a critical need for structural reform to secure raw material availability and safeguard India's position against regional competitors with duty-free import access.

The Indian textile industry comprises a vast network of spinning mills and apparel manufacturing units, serving both domestic and global fashion markets. Future growth strategies focus on increasing value-added production and achieving economies of scale. Historically rooted in traditional cotton spinning, the sector now faces significant modernization pressures to maintain its global footprint.