Cotton Duty Suspension To Enhance Competitiveness Of Textile MSMEs: CITI

New Delhi, Jun 1 (KNN) The Confederation of Indian Textile Industry (CITI) has welcomed the government's decision to temporarily remove the 11 percent import duty on cotton from June 1 to October 31, 2026.

The industry body stated that the move will improve the global competitiveness of India's textile and apparel sector, which is largely driven by MSMEs.

CITI said it had been advocating duty relief along with other stakeholders after the import duty on cotton was reimposed on January 1, 2026, following a temporary suspension between August and December 2025.

Ashwin Chandran, Chairman, CITI said the duty had become a significant challenge for Indian textile and apparel exporters at a time of global uncertainty, especially as competing Asian countries enjoy duty-free access to cotton.

He expressed gratitude to the Prime Minister and the ministries of Finance, Agriculture, Textiles and Commerce for providing what he described as a much-needed relief measure for the sector.

Industry Targets Higher Exports Through FTAs

According to CITI, the import duty had increased costs across the textile value chain, affecting India's export competitiveness. The industry body noted that cotton-based products account for a substantial share of the country's textile exports, while India is targeting textile and apparel exports of USD 100 billion by 2030.

Chandran said the temporary duty exemption would help exporters take advantage of emerging opportunities under recently concluded Free Trade Agreements (FTAs), including the India-UK trade pact expected to become operational in the coming months.

Demand-Supply Gap Necessitates Cotton Imports

He further noted that declining domestic cotton production has created a demand-supply gap, making imports necessary to meet specialised quality requirements and fulfil export commitments.

Citing a joint study by Gherzi and the International Cotton Advisory Committee, CITI said India requires a cotton policy framework that allows manufacturers to compete with regional peers that have unrestricted access to international cotton markets.

CITI Seeks Balanced Growth For Farmers And Manufacturers

The industry body emphasised that its demand for duty rationalisation is not at the expense of farmers' interests. It argued that a strong textile and apparel industry remains a key source of demand for cotton growers and can support long-term growth for both farmers and manufacturers.

India's textile and apparel sector is the country's second-largest employer and a major contributor to exports and economic output. Textile and apparel exports declined 2.2 percent year-on-year to USD 35.79 billion in FY26.

(KNN Bureau)