India’s agriculture ministry holds back on cotton duty cuts sought by the textile sector
India’s textile ministry wants temporary lower duties on raw cotton imports to help garment exporters. The agriculture ministry is resisting for now, citing potential fallout for cotton farmers and the political sensitivity of the market.
India is facing a fresh policy dispute over import duties on raw cotton. The textile ministry has proposed a temporary reduction or removal of those duties to lower costs for garment exporters affected by disruptions linked to the West Asia crisis. The agriculture ministry, however, has not agreed, arguing that cotton is too politically and economically sensitive to treat as a simple trade-relief measure.
According to The HinduBusinessLine, textile officials told the revenue department that farmers could still be protected if duty cuts were limited to the lean season. Even so, the agriculture ministry has remained cautious and is carrying out broader consultations before taking a position. Sources cited by the paper said the issue could become drawn out because the government is weighing not only export competitiveness but also the likely impact on growers and the domestic market.
Pressure is coming from the apparel industry. In a submission to Finance Minister Nirmala Sitharaman, the Apparel Export Promotion Council said cotton prices in northern India had been rising steadily because of tight domestic supply, limited stocks with ginners, weaker arrivals and heavier reliance on Cotton Corporation of India auctions. The group also argued that much of the crop has already moved out of farmers’ hands and into trader inventories, encouraging speculative behaviour and pushing up yarn and fabric costs.
Exporters say an immediate customs-duty cut would help stabilise prices and give relief to the full textile value chain. They also point to deteriorating trade performance: research body GTRI said India’s textiles and garment exports fell 2.2% to $35.8 billion in 2025-26. That has strengthened the textile ministry’s case that faster policy support is needed if exporters are to hold competitiveness in global markets while input costs remain elevated.
The farm side of the argument is different. India is one of the world’s largest cotton producers, and the Cotton Association of India recently revised 2025-26 output upward by 3.50 lakh bales to 320.50 lakh bales of 170 kilograms. Even so, the country still imports cotton during the lean summer months and for higher-quality varieties not available domestically. That is why the agriculture ministry says any duty reduction must be examined carefully: it could shift market expectations, alter farmgate incentives and directly affect the outlook for cotton growers.