Establish CPSF to decouple industry from price volatility, urges CITI

Ahead of the 2026-27 Union Budget the Confederation of Indian Textile Industry (CITI) has urged the government to establish a Cotton Price Stabilization Fund (CPSF) to decouple the textile value chain from the systemic price volatility that has historically eroded the margins of spinning mills.

CITI has advocated for a 5 per cent interest subvention and a reduction in margin money requirements from 25 per cent to 10 per cent. Through this, the trade body aims to provide MSME units with the liquidity necessary to secure raw materials during peak harvest windows.

Analysts observe, while global demand for high-count yarns remains steady, Indian manufacturers face a disadvantageous cost-of-carry compared to international peers. Rakesh Mehra, Chairman, CITI, noted, stabilizing procurement costs is no longer an internal preference but a structural necessity to meet the national $100 billion textile export target by 2030. The proposal includes a transition toward a Direct Benefit Transfer (DBT) model for farmers, ensuring they receive the Minimum Support Price without requiring the Cotton Corporation of India to maintain market-distorting stockpiles. If implemented, this shift would allow the industry to procure annual inventory during the high-supply months of November through March, effectively insulating the downstream apparel segment from seasonal price spikes and enhancing the predictability of export pricing.

The Confederation of Indian Textile Industry serves as the apex chamber representing the entire textile spectrum from farm to fashion. It advocates for policy reforms across ginning, spinning, and garmenting sectors. CITI currently focuses on regional manufacturing hubs and eyes a 10 per cent annual growth in export contribution through sustainable production and enhanced credit accessibility for small-scale industrial units.