India’s Record Cotton Imports: Duty Waiver, Low Output

India’s cotton imports are expected to increase by 8% next season, reaching a new high. This growth is driven by New Delhi’s decision to permit duty-free imports and a decline in domestic output to its lowest level in 17 years, according to industry sources.

As the second-largest global cotton producer, higher imports are likely to boost world prices, currently near six-month lows.

In the 2025/26 marketing year, beginning October 1, India’s cotton imports are expected to reach 4.5 million bales, with nearly 3 million bales in the December quarter, according to Atul Ganatra, President of the Cotton Association of India (CAI).

Last year, imports reached a record 4.1 million bales from the U.S., Brazil, Australia, and Africa.

“Cotton is much cheaper abroad right now than locally, so textile mills are eager to import before December,” Ganatra added.

New Delhi has extended an exemption from the 11% import duty until December 31. Alongside the duty waiver, concerns about domestic supply disruptions caused by crop damage are prompting mills to seek higher-quality imported cotton, a trader in New Delhi with a global trade firm mentioned.

Heavy and untimely October rains affected cotton crops in Maharashtra, Gujarat, Andhra Pradesh, and Telangana, major cotton-producing states that contribute over 70% of India’s total output.

CAI estimates India’s cotton production for 2025/26 will decline by 2.4% year-on-year to 30 million bales, the lowest since 2008/09, with some traders predicting it could fall further to about 28 million bales.

The textile sector, a key employer in India, supports over 45 million jobs directly.

Cotton demand is expected to decrease by 4 to 4.5%, reaching 30 million bales in 2025/26 amid sluggish exports.

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“Demand from the U. S. has decreased after imposing substantial tariffs, forcing many textile units in southern India to reduce operations,” Ganatra explained.

The U. S., responsible for nearly 29% of India’s $38 billion annual textile exports, doubled tariffs on Indian imports to as much as 50% starting in August.