India’s textile and garment exporters have urged the central government to suspend the 11% import duty on cotton, citing a sharp rise in domestic prices that has significantly eroded margins and weakened their global competitiveness.
Domestic cotton prices have increased by 7%––8% over the past month, driven by a surge in demand as higher crude oil prices pushed up the cost of synthetic fibres, prompting mills to revert to natural inputs. According to data from the Cotton Association of India, prices of ginned cotton have risen by 11%––12% during the same period.
Industry stakeholders have called for temporary relief similar to last year, when the government waived import duties on cotton between August and December to ease supply constraints. International cotton prices have also climbed by 12%––15% over the past month, with industry experts noting that cotton had emerged as one of the most affordable agricultural commodities for investors.
India’s textile export sector relies heavily on imported long-staple and contamination-free cotton to meet the quality standards of overseas buyers. Chandrima Chatterjee stated that prices across nearly all raw materials had increased, adding that cotton accounted for approximately 60%–70% of the textile value chain. She indicated that the industry had requested the government to waive the import duty on cotton for a period of three to six months.
Rising crude oil prices, influenced by geopolitical tensions including the US-Israeli strikes on Iran, have led to a 10%–60% increase in the cost of various raw materials used in textile production. Sanjay Jain remarked that supply chains had become increasingly unreliable and expensive, and noted that Indian exporters were struggling to compete with counterparts in countries such as Vietnam and Bangladesh, where manufacturers benefit from duty-free access to raw materials.
