According to media reports, Citi flags rising costs, falling domestic output and global competition pressures
The Confederation of Indian Textile Industry (Citi) has urged the government to permanently abolish the 11 per cent import duty on cotton in the Union Budget 2026, citing rising input costs and concerns over the global competitiveness of Indian textile and apparel manufacturers.
A Citi delegation met Union Agriculture Minister Shivraj Singh Chouhan last week to seek his intervention for the permanent removal of the import duty on cotton across all varieties, the industry body said, PTI reported.
India’s textile sector, the country’s second-largest employer, depends on steady access to quality cotton. In the presence of a continuing demand-supply mismatch, the government had extended the exemption on cotton imports until 31 December 2025, a decision welcomed by industry associations.
With no further notification issued, the 11 per cent import duty was reinstated from 1 January 2026. CITI said the move could adversely affect the competitiveness of India’s textile and apparel industry. According to the industry body, the agriculture minister assured the delegation that the concerns raised would be examined during the review process.
Falling Production, Global Pressures Add Strain
Citi also flagged a sustained decline in domestic cotton production, which it said is projected to fall to its lowest level in nearly two decades this year, intensifying concerns over supply availability.
The industry body said reinstating the duty would further add to cost pressures for manufacturers. Over the past decade, India’s average cotton imports stood at around 20 lakh bales annually, accounting for about 6.8 per cent of average domestic production.
Imports are largely driven by quality and specification requirements for specialised manufacturing and export-linked orders and do not displace domestically produced cotton, Citi said. It also noted that competing textile-exporting countries such as Bangladesh and Vietnam allow duty-free cotton imports, giving them a cost advantage in global markets.
The demand comes at a time when the textile and apparel sector, one of India’s largest sources of employment, is facing additional pressure from a 50 per cent US tariff that came into effect on 27 August 2025. Cotton-based products form a significant share of India’s textile exports.
The US remains India’s largest export market for textiles and apparel, accounting for nearly 28 per cent of total export revenues. Exports to the US were valued at close to USD 11 billion in FY2024–25, according to industry data.
