NEW DELHI: The Bharatiya Kisan Sangh (BKS), a farmers’ organisation affiliated with the Bharatiya Janata Party (BJP), has urged the Union government not to extend the import duty exemption on cotton until the end of the year.
In a letter to Union Finance Minister Nirmala Sitharaman, BKS leader Mohini Mohan Misra said the decision would adversely affect millions of cotton farmers, as the new crop is set to arrive in the market in October. The letter was also addressed to Union Agriculture and Farmers Welfare Minister Shivraj Singh Chouhan.
The government has decided to extend the 11% import duty exemption on cotton from September 30 to December 31, 2025. The Finance Ministry said this move is intended to increase the availability of cotton for the Indian textile sector.
Earlier, the government had announced an exemption on the 11% import duty from August 19 to September 30. Following this, cotton prices in the open market dropped from about Rs 57,000 per candy (355.6 kg) to around Rs 55,000 per candy. Experts believe prices could fall further to around Rs 50,000 per candy by October, when the new produce hits the market.
Agriculture and trade expert Devinder Sharma warned that the decision could further discourage farmers from growing cotton, as production is already declining.
India’s cotton production has fallen from 352.48 lakh bales in 2020-21 to 306.92 lakh bales in 2024-25 due to adverse weather and pest attacks. The area under cultivation has also reduced, with acreage falling by 3.24% compared to the previous year.
Earlier, the Samyukta Kisan Morcha also condemned the removal of the duty, warning that it would worsen the distress of cotton farmers.
Meanwhile, the U.S. Department of Agriculture (USDA) welcomed India’s move, expecting it to boost cotton exports from the U.S. Experts suggest the exemption extension came under pressure to appease the U.S., which recently imposed tariffs of 59% to 63.9% on Indian textiles.
The textiles industry, which had earlier termed the 40-day import window insufficient, is now preparing for large-scale imports. India mainly imports cotton from the U.S., Australia, and Egypt. In 2023, imports stood at $236 million from the U.S., $132 million from Australia, $124 million from Egypt, $22.1 million from Brazil, and $19.3 million from Tanzania.
The decision to extend the exemption is expected to ease pressure on the textile sector by allowing it to source cheaper cotton. Chandrima Chatterjee, Secretary General of the Confederation of Indian Textile Industry (CITI), welcomed the move, saying the extension would help the industry place fresh orders for procurement.