India hikes cotton MSP for 2025-26, raising concerns about export competitiveness

In a move aimed at boosting farmer incomes, the Indian government has raised the Minimum Support Price (MSP) for cotton by 7 per cent for the 2025-26 crop season. Effective from October 2025 to September 2026, the MSP for long-staple cotton will increase from Rs 7,521 to Rs 8,110 per quintal, and medium-staple cotton from Rs 7,121 to Rs 7,710.

While the hike is expected to benefit cotton growers, it has triggered concern across the textile value chain. Industry leaders warn that higher procurement prices could inflate input costs, affecting yarn, fabric, and apparel prices and threatening India’s competitiveness in global garment markets.

The Confederation of Indian Textile Industry (CITI) noted the growing gap between domestic and international cotton prices. Former CITI president Sanjay Jain cautioned without parity, India risks losing market share to low-cost exporters like Bangladesh, Vietnam, Cambodia, and China.

Manufacturers in Gujarat and Punjab predict a 5 per cent rise in cotton garment prices due to costlier raw materials. While some firms may absorb part of the increase by cutting margins, exporters are concerned about long-term sustainability amid tightening global price pressure. The MSP revision underlines the government’s challenge: improving farmer welfare without jeopardizing India’s vital export edge.