Textile industry seeks six-month extension of duty-free cotton imports
India’s textile industry wants the 11% duty waiver on raw-cotton imports extended beyond October 31, citing sharp cotton and yarn inflation, supply shortages and pressure on garment-export margins. Farmer groups oppose an extension during the harvest season.
What happened
Indian Textile Industry · India's textile industry seeks a six-month extension of duty-free raw-cotton imports beyond October 31 as cotton and yarn prices
Key facts
- 6-month extension requested beyond October 31
- 11% raw-cotton import duty waived from June to October 31
- Cotton prices increased about 20% in 2026
- Cotton yarn prices jumped 60% in 2026
- Cotton prices rose about 24% over six months
- 2025-26 cotton output fell 2.35% to 290 lakh bales of 170 kg
- Cotton production has declined more than 17% since 2021-22
- Yarn accounts for about 60% of garment raw-material costs
- Domestic cotton price estimated at ₹9,000 per quintal
Why this matters
The policy window may increase the strategic value of import-sourcing partnerships, yarn procurement contracts and overseas cotton supply relationships for Indian apparel platforms.
What to watch
- Formal Commerce/Finance Ministry notification before October 31 specifying extension length, product coverage, quotas, or conditions.
- Domestic cotton arrival volumes and mandi prices during the harvest season.
- Cotton Corporation of India procurement actions and farmer-group protests against continued duty-free imports.
- ICE cotton futures, Indian yarn prices, and the spread between domestic and imported cotton landed costs.
- Export-order trends and garment-exporter commentary on margin compression, cancellations, and buyer price negotiations.
- Retail apparel price changes, promotional activity, and shifts toward synthetic or blended-fiber assortments.
- Lock forward yarn and fabric contracts before the policy decision, with separate plans for duty-free and duty-restored import costs.
- Increase use of cotton blends, recycled fibers, and lower-cotton product designs in spring/summer assortments to reduce exposure to cotton volatility.
- Review vendor contracts for cotton-price pass-through clauses and negotiate shared cost-risk mechanisms with key mills and garment suppliers.
- Prioritize margin protection in cotton basics and denim; reserve promotions for categories with lower cotton content or older high-cost inventory.
- Diversify sourcing across domestic mills and overseas yarn/fabric suppliers, while assessing lead-time, quality, and currency risks.