Amid criticism over the removal of the 11% customs duty on cotton, which according to some opposition leaders would hit Indian farmers, the textile ministry has said that farmers’ interests would be safeguarded.
The ministry in a statement said that the Minimum Support Price (MSP) mechanism operated by the Cotton Corporation of India Ltd. (CCI) ensures that farmers receive at least 50% above their cost of production.
The ministry reiterated that an 11% duty cut on cotton imports till 31 December is expected to stabilise the input costs across the textile value chain, including yarn, fabric, garments, and made-ups, providing relief to manufacturers and consumers alike. The Indian textile industry is at risk of losing a massive part of their US exports due to a 50% increase in tariff.
The ministry said that imported cotton often caters to specialized industrial requirements and does not substitute domestic cotton. It further said most imports occur during lean periods or when domestic stocks are insufficient, which minimizes competition with peak domestic procurement periods. “The government monitors cotton prices closely and retains the flexibility to impose safeguards as and when required,” said the statement.
Affordable, high-quality cotton strengthens India’s position in export markets, reviving orders for small and medium enterprises as well as export-oriented units, said the ministry, adding that the textile-apparel value chain employs over 45 million people, and a stable cotton supply is crucial to prevent job losses and encourage industry growth.
Cotton textile exports accounted for approximately 33% of India’s total textile and apparel exports during April–October 2024–25, valued at $7.08 billion, making it the second-largest contributor after readymade garments. With 95% of domestic cotton consumed by the textile industry, the duty exemption is expected to indirectly benefit farmers as global competitiveness enables mills to pay better prices to cotton farmers.