For 2024-25, India increases cotton MSP by over 7%

India's cotton industry is set for a price hike as the government raises Minimum Support Prices (MSP) by over 7 per cent for the upcoming season. This aims to help farmers but may squeeze textile producers.

The MSP increase for medium staple cotton is Rs 7,121 per quintal, a Rs 501 rise from last year. Similarly, long staple cotton will see an MSP of Rs 7,521 per quintal. Industry experts predict higher production costs due to these increased cotton prices for ginners and spinners. They also expect market prices to stay above the MSP level.

A key concern is whether textile companies like spinners, fabric manufacturers, and garment makers can pass on these extra costs. The sluggish global demand for garments might make it difficult for them to raise prices effectively. This could lead to reduced profit margins for these businesses.

Overall, the MSP hike is a positive step for cotton farmers but may pose challenges for the textile industry in terms of managing production costs.