India is considering a two-month extension of its 11% cotton import duty exemption to ease raw material shortages, stabilise prices and strengthen the competitiveness of its textile industry.
India is expected to extend duty-free cotton imports until December 31, 2026, as declining domestic production and firm cotton prices increase pressure on spinning mills and textile manufacturers.
According to Reuters, citing three government and industry sources, the proposed extension would prolong the existing exemption from the 11% import duty, introduced on June 1 and scheduled to expire on October 31.
The government is expected to issue a formal notification following inter-ministerial consultations. The extension has not yet been officially confirmed.
Cotton Production May Fall Below 29 Million Bales
India’s cotton production is projected to fall below 29 million bales in 2026–27, against anticipated domestic demand exceeding 34 million bales, according to industry estimates.
Irregular monsoon rainfall, pest attacks and outdated genetically modified cotton seed technology have contributed to weaker production prospects.
Domestic cotton prices remain above Rs9,000 per 100 kg, exceeding the government’s minimum support price of Rs8,717.
Meanwhile, India’s cotton stock-to-use ratio has declined to approximately 31%, its lowest level in five years, indicating tighter supplies.
Cotton Imports Surge 63%
India’s cotton imports increased 63% year on year to $1.1 billion during April–September 2026, according to trade ministry data.
A longer duty-free window could encourage additional purchases from the United States, Brazil and Australia. However, US cotton futures trading above 83 cents per pound, elevated freight charges and rupee depreciation could limit import volumes.
Textile Mills Seek Lower Input Costs
The Confederation of Indian Textile Industry has advocated extending duty-free access to improve manufacturing competitiveness against Bangladesh and Vietnam.
Lower cotton procurement costs could benefit spinning mills and downstream textile exporters, although increased imports may put downward pressure on domestic farmgate prices.
For competing textile-producing countries, cheaper Indian cotton could intensify regional competition in cotton yarn, fabrics and garments.
The immediate development to watch is India’s official customs notification, followed by new-season cotton arrivals, import volumes and their effect on spinning-mill raw material costs.
