Mumbai cotton yarn market recovers while Tiruppur reels under US tariffs impact

A stark divergence has emerged within the Indian cotton yarn market with the sentiment in Mumbai turning cautiously optimistic while southern manufacturing powerhouses like Tiruppur reeling under the weight of a staggering 50 per cent cumulative US tariff.

This ‘double-blow’ duty- initially a 25 per cent reciprocal tariff followed by an additional 25 per cent penalty linked to geopolitical oil trades and Russia-India diplomatic ties- has effectively made Indian cotton knits 30 per cent more expensive than competitors from Bangladesh and Vietnam. The immediate fallout has been severe, with Tiruppur reporting Rs 15,000 crore in wiped-out orders and a 12.9 per cent dip in regional textile exports. Payment constraints and sluggish garmenting activity have forced many mills to operate at reduced capacities, desperate for a breakthrough in the ongoing India-US trade talks.

In contrast, the Mumbai market is witnessing a localized recovery. Buyers in the financial capital have begun aggressive restocking, spurred by a 1.6 per cent rise in domestic cotton yarn prices  and fears of further cost escalations. Gujarat’s spot market remains firm, with Shankar-6 variety consolidating above Rs 53,000 per candy, largely because the Cotton Corporation of India (CCI) has procured nearly 31.19 lakh bales (as of December 11) at the new, higher Minimum Support Price (MSP) of Rs 7,710 per quintal for medium staple. This state-led procurement is thinning open-market arrivals, forcing private spinners to bid higher for quality lint. While the export ‘chill’ persists, strengthening summer demand for hosiery is providing a thin but vital lifeline for domestic-focused weavers.