India’s Cotton Imports Projected to Hit Record High Following Customs Duty Exemption Extension

India’s cotton imports for the 2026-27 marketing year (October-September) are projected to scale new peaks, driven by the Centre's decision to extend the customs duty exemption on cotton imports by two months to December 31, 2026. The exemption, previously set to expire on October 31, was initially enacted on June 1 to support the domestic textiles sector.

Trade sources indicate that imports for the current marketing year will equal or surpass the previous year's figures of 71 lakh bales (170 kg each), up significantly from 41 lakh bales. The extension allows mills to access contamination-free cotton at competitive prices to bridge a domestic supply gap.

Vinay N Kotak, President of the Cotton Association of India (CAI), noted that the duty waiver helps Indian mills maintain cost competitiveness against global rivals in countries like Bangladesh and China. Domestic crop sizes have faced constraints due to reduced cultivation areas and drought conditions in key producing states.

Atul Ganatra, CMD of Radhalakshmi Group, stated that domestic production for 2026-27 is estimated at around 280 lakh bales, down from 330 lakh bales in 2025-26. Meanwhile, consumption is projected to rise to 365 lakh bales, compared to 315 lakh bales previously. Ganatra attributed the surge in cotton consumption to a shift among mills from synthetic yarns to cotton, following a rise in crude prices and a 35 percent spike in polyester and viscose prices stemming from conflicts in West Asia.

Additionally, spinning mills are experiencing steady yarn demand from Bangladesh and China, alongside domestic spindle capacity expansions in states such as Odisha, Chhattisgarh, Madhya Pradesh, and Gujarat. Anand Popat of CotYarn Tradelink noted that premiums on imported cotton could rise by 1-2 cents per pound, with domestic prices currently hovering around 66,000 to 67,000 rupees per candy of 356 kg—matching the landed price of Brazilian cotton.

Ramanuj Das Boob, a sourcing agent in Raichur, observed that while the duty exemption keeps imports competitive and caps domestic price increases, cautious buying by mills will depend on yarn realisations, ICE Futures, and currency fluctuations. Meanwhile, new crop arrivals are currently below trade expectations at 70,000 to 80,000 bales daily, as yields drop and farmers withhold produce in anticipation of better pricing.

"The extension of customs duty exemptions on cotton imports provides essential relief to Indian textile mills grappling with lower domestic yields and elevated synthetic yarn costs. For businesses operating in the manufacturing and supply chain sectors, navigating raw material cost volatility requires agile sourcing strategies and careful margin management. While imports help bridge the immediate supply deficit, stakeholders must closely monitor international futures, currency movements, and domestic crop arrivals to maintain long-term operational profitability." — Dr. Shishir Gupta, Founder & CEO, StartupLanes