Cotton Yarn Prices Surge 60% To Rs 400/Kg, Threaten Textile Export Competitiveness

New Delhi, Sept 11 (KNN) A 60 percent surge in cotton yarn prices is squeezing margins across India’s textile value chain and could undermine export opportunities created by recent FTAs. 

Prices have risen to around Rs 400 per kg from Rs 250 per kg in early 2026, prompting apparel exporters to seek government measures to contain prices.

The rise coincides with a cotton shortage of around 10 lakh bales, according to the Tiruppur Exporters’ Association (TEA). TEA Secretary General Kumar Duraiswamy called for extending the cotton import duty exemption and boosting domestic production through the Cotton Mission.

Declining Cotton Output Adds To Pressure

India produced 290.91 lakh bales of cotton in the 2025-26 season, down from 352.48 lakh bales in 2020-21, with the government attributing the decline mainly to farmers shifting to more remunerative crops, reported Economic Times.

TEA Treasurer R. Gopalakrishnan linked rising yarn prices to global market conditions and lower domestic production, noting that mills hold only four to six weeks of cotton stocks.

Higher yarn prices are raising costs for fabric and garment manufacturers, while exporters struggle to pass on the increase. Tiruppur exporters estimate production costs have risen by up to 15 percent, said Kanishk Maheshwari, Co-founder and Managing Director of Primus Partners.

FTA Benefits At Risk From Input Costs

Industry players said higher input costs could weaken India’s competitiveness despite its expanding FTA network. 

Kewal Kiran Clothing Joint MD Hemant Jain said sustained yarn price increases would eventually raise costs and squeeze margins, as companies in price-sensitive markets cannot fully pass on higher costs to consumers without hurting demand. 

He stressed the need for sourcing, inventory and operational efficiencies, noting that FTAs can create opportunities only if supported by a competitive domestic cost structure. 

Industry Seeks Stable Raw Material Supply

Numero Uno Clothing Director-Marketing & Business Development Jaiwant Singh Dhingra called for greater price stability and predictable cotton and yarn supplies, alongside stronger support for technology and modern manufacturing. 

Maheshwari said policy should focus on reliable raw-material supplies, greater flexibility on cotton imports and measures to prevent yarn supply distortions. 

He said the recent duty-free cotton import window was a positive step but urged structural reforms to improve productivity, transparency and supply-chain efficiency.

Maheshwari noted that while FTAs provide market access, cost competitiveness will determine whether exporters can secure sustained orders. 

Industry experts said India must address input-cost volatility, productivity, scale and technology adoption while strengthening the entire textile value chain to convert lower FTA tariffs into lasting global market-share gains.

(KNN Bureau)