The Cotton Corporation of India (CCI) has bought almost 100 lakh bales of cotton at Minimum Support Price (MSP) from farmers in the current cotton season, which began in October 2024. CCI has sold 35 lakh bales in the domestic market already.
Lalit Kumar Gupta, CCI, Chairman and Managing Director said over 500 procurement centres were set up to facilitate their procurement operations in the major cotton-producing states because of the lower mill demand. He indicated that continued weakness in the local market could prolong the procurement at MSP stage next season.
Firstly, government sources indicated that the overall cost incurred by MSP operations was Rs. 37,500 crore (US $4.5 billion) so far. Also, if the market does not improve in any reasonable time frame, the costs will remain high. Government-backed MSP moves into its second stage for the 2025-26 season with an 8% hike which will further increase costs to procure cotton at MSP.
At the same time, cotton imports skyrocketed. May 2025 had an import volume 133% higher than a year previously, with the value of imports up 131% in April – May 2025 compared to April – May 2024. Representatives of the industry cited that international cotton prices are nearly 8% lower than Indian domestic prices, indicating that cotton can be imported even with an 11% duty and benefit manufacturers in the short term with only a marginal cost higher than if it were sourced domestically.
However, industry representatives said that benefit does not reflect improved competitiveness for exports. Official representatives claim the 11% cut in import duty is the aspect of the cost structure that has the most significant impact across the global positioning of the Indian textile manufacturer.
