Suggestion to Adopt a Middle Ground on Reducing Import Duty on Cotton

04-May-2026 04:07 PM

New Delhi: Although the Union Ministry of Textiles has urged for the complete removal of the import duty currently levied on cotton—thereby allowing the industry duty-free imports until December 2026—the Ministry of Agriculture is currently not in favor of this proposal and is instead advising the adoption of a middle ground. The Ministry of Agriculture contends that granting approval for duty-free cotton imports at this juncture would send a misleading signal to farmers, potentially diminishing their enthusiasm for and interest in cotton cultivation.

According to the Ministry, the alternative under this "middle ground" approach is to either reduce or completely eliminate the import duty on cotton during the months of September and October; this is deemed feasible as the country currently possesses sufficient stocks of cotton to meet domestic demand and requirements through August. A second alternative proposed is to lower the import duty on cotton from its current level of 11 percent to a fixed rate of 6–7 percent.

The Ministry of Agriculture has received information indicating that the government agency—the Cotton Corporation of India (CCI)—currently holds a stock of approximately 4.7 million cotton bales. Furthermore, when combined with the stocks held by farmers, traders, and processors, the available supply is sufficient to meet demand at least through August. Since cotton imports from abroad are already underway, the only issue at hand pertains to the high domestic prices of the commodity.

As the arrival of the new crop is set to commence in October, the government should defer its decision until just prior to that period, basing its final determination on the prevailing status of the harvest. Cotton sowing in Punjab is currently in its final stages, while sowing operations are scheduled to begin next month across all other major cotton-producing states in the country.