Import Duty on Cotton Likely to be Suspended

26-May-2026 03:46 PM

New Delhi. Due to the ongoing crisis in West Asia and a surge in global market prices, the import of cotton into India has become significantly expensive. This is causing severe difficulties for the domestic textile industry.

In light of this, the government is seriously considering a temporary suspension of the 11 percent customs duty currently applicable to cotton imports. It is understood that the import duty could remain suspended until October of this year.

It is noteworthy that cotton imports were last made duty-free between August and September 2025, when U.S. tariffs began to have a detrimental impact on manufacturing and investment.

According to industry analysts, cotton prices rose by as much as 10 percent in April alone. The supply of goods in the markets has dwindled as producers have withheld their cotton stocks. The prices of energy sources and fuel have also risen.

After China, India is the world's largest producer of cotton; however, it still imports approximately 15 percent of its cotton and 20 percent of its cotton yarn to meet domestic demand and requirements. Over the past two to three years, cotton production in India has been on the decline.

Although the government has been significantly increasing the Minimum Support Price (MSP) for cotton every year, wholesale market prices often remain below this level.

Consequently, producers face immense difficulty in selling their produce at profitable rates, compelling the government agency—the Cotton Corporation of India (CCI)—to procure vast quantities of cotton from farmers at the MSP.