CAI urges removal of 11% cotton import duty to aid textile sector

Industry body seeks free cotton trade to restore competitiveness.

The Cotton Association of India (CAI) has called on the government to abolish the 11 per cent customs duty on raw cotton imports, warning that the textile sector is facing one of its most challenging phases. The industry, a major contributor to exports, rural employment and manufacturing activity, is under pressure due to high domestic prices driven by lower productivity and a steep minimum support price. According to CAI, the duty is further distorting prices and hurting the competitiveness of Indian mills.

The association noted that cotton traders and ginners, who act as unsecured creditors within the textile value chain, are also feeling the strain as mills struggle with elevated input costs. CAI said the removal of import duty is essential to ensure steady and competitively priced raw material, especially when farmers are already protected under MSP operations.

The industry is additionally grappling with uncertainties around US tariffs and recessionary conditions in Europe. CAI warned that without timely intervention, the sector could face job losses, loan defaults and rising bad debts. “These fruits can be reaped only and only if 11% duty on import of raw cotton into India is removed and thereby making available raw material at competitive rates,” the association stated.

CAI believes that ongoing trade negotiations led by Commerce Minister Piyush Goyal, under the guidance of Prime Minister Narendra Modi, along with global sourcing shifts under the China Plus One trend, create a strong export opportunity for India—provided mills have access to competitively priced cotton.

The association added that unseasonal rains this year have damaged domestic crop quality, forcing mills to depend on imports. Without duty relief, buyers may shift to Vietnam, Bangladesh, Pakistan and others, posing long-term risks to India’s market share.

CAI has urged the government to act swiftly to support the survival and growth of the entire cotton-to-textile ecosystem.