Removing Cotton Import Duty Can Boost Industry Confidence Amid US Tariff Uncertainty: CITI

ENA Sectors 2025-12-15 15:52:02 New Delhi, Dec 15 (KNN) The Confederation of Indian Textile Industry (CITI) has called on the government to remove the 11 per cent import duty on all varieties of cotton, arguing that the move is essential to safeguard the global competitiveness of Indias textile and apparel sector amid mounting external and domestic pressures. Rationale Amid Trade Uncertainty At a time when the ongoing uncertainty surrounding the US tariff issue remains a major concern for Indias textile and apparel sector, the removal of the import duty on cotton can act as a huge confidence-booster by ensuring a crucial raw material like cotton is available at internationally competitive prices, CITI Chairman Ashwin Chandran said. The government had earlier extended the exemption on cotton import duty until December 31, 2025, from the previously announced deadline of September 30. Supply Concerns and Price Alignment According to CITI, the case for removing the duty has strengthened due to indications of a possible decline in cotton output this season, along with concerns over fibre quality following unseasonal rainfall. Chandran noted, The removal of import duty on cotton of all varieties will reduce the divergence between domestic and global prices and help restore the competitiveness of Indias spinning and textile industries. He added that such a measure would also allow the minimum support price (MSP) and other farmer-support mechanisms to operate as intended, without causing distortions in downstream prices. The MSP for kapas has risen by nearly 8 per cent in the current cotton season. Industry Engagement and Import Trends The issue was raised by CITI and other industry bodies at a stakeholder meeting convened under the Committee on Cotton Production and Consumption for the 2025 26 cotton season on December 8. Over the past decade, Indias average cotton imports have been about 2 million bales annually, accounting for roughly 6 per cent of average production. These imports largely cater to specialised cotton requirements or back-to-back arrangements linked to global brands. Impact of Higher Tariffs on Exports The US remains Indias largest market for textile and apparel exports, contributing nearly 28 per cent of export revenues. Shipments to the US were valued at about USD 11 billion in FY2024 25. The impact of the higher tariff has already been reflected in export data. In October 2025, textile exports declined by 12.92 per cent year-on-year, while apparel exports fell by 12.88 per cent, a trend largely attributed to the elevated US tariff. Sectoral challenges have been compounded by Mexicos recent decision to impose a 50 per cent tariff on Indian goods, in the absence of a free trade agreement between the two countries. Outlook CITI maintains that removing the cotton import duty would be a timely intervention to ease cost pressures, stabilise raw material availability and help the sector navigate a challenging global trade environment. (KNN Bureau) 44424 https://knnindia.co.in/news/newsdetails/sectors/removing-cotton-import-duty-can-boost-industry-confidence-amid-us-tariff-uncertainty-citi 2025-12-15 15:52:02 knnindia.co.in Removing Cotton Import Duty Can Boost Industry Confidence Amid US Tariff Uncertainty: CITI