India weighs removing 11 percent cotton import duty amid supply gap
India is in advanced consultations over a possible removal of the 11 percent duty on raw cotton imports as a widening supply gap raises costs for spinning mills and textile manufacturers.
The Indian government says it is in an advanced stage of consultation over the 11 percent customs duty on raw cotton imports and is examining whether the levy can be removed. A senior official told PTI that a decision is expected soon, putting a key agri-trade issue near the top of the policy agenda.
The discussions involve the finance, textiles and agriculture ministries. Pressure is coming from the domestic textile industry, which wants the duty removed to ease cost pressures created by high prices in the local market. For processors and manufacturers, the question is no longer only about trade policy but about raw-material availability.
Industry representatives argue that the imbalance is large. They estimate cotton demand from the textile sector at around 337 lakh bales for the current year, while cotton arrivals for the 2025-26 season are projected at 292.15 lakh bales. That leaves a supply-demand gap of nearly 45 lakh bales.
A delegation of apparel industry representatives and exporters recently met Vice President C P Radhakrishnan and several Union ministers to press the case for duty removal. According to the industry, the shortfall is squeezing spinning mills and downstream textile manufacturers because access to high-quality raw material is limited while input costs are rising.
The issue sits at the intersection of agriculture, trade and manufacturing. Cotton is a farm commodity, but the current debate is being driven by what happens after harvest, when domestic availability proves insufficient for industrial demand. That is why the consultations are being handled across ministries and why the outcome could quickly influence import flows, price formation and purchasing conditions in the wider cotton chain.