Lower crop estimates, rising imports, weather-related risks and expanding textile export opportunities are putting India’s fibre availability under scrutiny for the 2026–27 cotton season.
India’s cotton sector is facing a challenging supply-demand outlook for the 2026–27 season, as concerns over domestic crop production coincide with expectations of stronger demand from the textile industry.
Erratic rainfall, moisture stress and the risk of El Niño-related weather disruptions have raised concerns about cotton yields. Meanwhile, new and potential Free Trade Agreements (FTAs) could create additional export opportunities for Indian textile and apparel manufacturers, increasing the industry’s raw material requirements.
Industry estimates cited by The Economic Times suggest that India’s cotton production could fall below 280 lakh bales, while consumption may exceed 360 lakh bales if export demand strengthens. If these projections materialise, the gap between domestic supply and demand could widen further.
The developing situation has renewed attention on India’s cotton availability, import requirements, raw material prices and the long-term competitiveness of its textile value chain.
India’s Record Cotton Imports Highlight Supply Challenges
India imported an estimated 71 lakh bales of cotton, each weighing 170 kg, during the 2025–26 season. This compared with approximately 57.4 lakh bales in the previous season, marking a record level according to industry estimates.
The Southern India Mills’ Association (SIMA) estimated cotton consumption during the previous season at around 340 lakh bales, against imports of approximately 70 lakh bales.
These figures highlight the growing importance of imported cotton in meeting the requirements of India’s textile industry.
Although India remains one of the world’s largest cotton-producing countries, domestic production does not always align with the industry’s requirements in terms of volume, quality and availability. Imports help bridge this gap, particularly when domestic supplies tighten.
The challenge for the 2026–27 season is whether domestic production can meet demand if textile manufacturing and exports continue to expand.
Weather Risks Raise Concerns Over Cotton Production
Weather conditions have emerged as a significant factor in India’s cotton outlook.
Several cotton-growing regions have experienced moisture stress, while industry participants have reported that some farmers are reducing picking activities or clearing fields earlier than usual to shift to alternative crops.
The World Meteorological Organization (WMO) had warned that a strong El Niño was developing during 2026, raising the risk of abnormal rainfall and temperature patterns across agricultural regions.
For cotton cultivation, the timing and distribution of rainfall are particularly important during flowering and boll development. Adverse conditions during these stages can affect boll numbers, boll weight, fibre quality and overall yield.
Consequently, the final crop outcome will depend not only on the area under cultivation but also on weather conditions throughout the growing season.
Cotton Prices Rise Amid Supply Concerns
Domestic cotton prices have reportedly strengthened since the beginning of the new cotton year on October 1.
Benchmark Gujarat 29-mm cotton reportedly increased by around ₹4,500 per candy to ₹68,500 per candy, reflecting concerns about crop availability and expectations of higher prices.
Farmers holding kapas in anticipation of improved realisations have also influenced market availability, according to the supplied industry assessment.
However, the increase in cotton prices has not been matched proportionately by yarn prices, creating pressure on ginners and spinning mills.
Higher raw material costs can narrow processing margins when downstream selling prices do not increase at a similar pace. For spinning mills, this creates a challenge in balancing procurement costs, production requirements and customer pricing.
The relationship between cotton and yarn prices will therefore remain an important factor for the industry’s operating margins during the season.
Cotton Import Duty Decision Remains Important
The temporary exemption from the 11% import duty on raw cotton was scheduled to remain in effect until October 31.
Reports published on October 26 indicated that the government was considering extending the duty-free import period until at least the end of December. However, no final official extension had been announced at the time of those reports.
For textile mills, an extension could provide additional flexibility to source cotton from international markets and manage domestic supply constraints.
For domestic cotton farmers, however, the timing and scale of imports could influence market sentiment and prices during the arrival season.
The policy decision involves balancing the raw material requirements of textile manufacturers with the interests of cotton growers. Predictable import policies and timely communication are important for both groups when making procurement, production and selling decisions.
Brazilian Currency Movements Add to Global Competition
Developments in Brazil have introduced another variable into the international cotton market.
Following Brazil’s October 25 election, the Brazilian real reportedly experienced a sharp decline on October 26, marking one of its steepest falls in decades.
A weaker Brazilian real can improve the local-currency returns from dollar-denominated exports, potentially encouraging exporters to sell more aggressively and strengthening the international competitiveness of Brazilian commodities.
Brazil has become a major supplier in the global cotton market. Changes in its currency and export pricing can therefore influence the sourcing decisions of international textile manufacturers.
For India, this creates a complex market situation: domestic cotton availability could tighten even as competitively priced imports from major producing countries become an important consideration for mills.
The eventual effect will depend on international cotton prices, exchange rates, freight costs, quality specifications and the relative competitiveness of available supplies.
Trade Agreements Could Increase Cotton Demand
India’s textile and apparel industry is also looking towards new export opportunities.
Textile companies have reported improved enquiries from the United Kingdom, while future trade agreements, including a potential agreement with the European Union, could create additional opportunities for Indian manufacturers.
If these opportunities translate into higher export orders, cotton consumption could increase. Industry estimates suggest that demand may exceed 360 lakh bales under a stronger export scenario.
Higher textile exports could support manufacturing activity across spinning, weaving, processing and garment production. However, sustained growth would also require dependable access to competitively priced raw materials.
The availability, quality and cost of cotton will consequently remain important factors in determining how effectively India’s textile industry can respond to international demand.
Improving Cotton Productivity Is a Long-Term Priority
Imports can help address immediate shortages, while import-duty adjustments can influence procurement costs and minimum support prices (MSP) can provide a price-support mechanism for farmers.
However, these measures alone cannot resolve the structural challenges affecting India’s cotton supply.
Long-term improvements will require greater productivity, better fibre quality and stronger farm-level profitability.
Potential priorities include climate-resilient cotton varieties, improved agronomic practices, efficient soil and water management, better pest control, mechanisation, cleaner cotton production and stronger traceability systems.
Farmer Producer Organisations (FPOs) could also help aggregate cotton supplies and strengthen connections between growers, ginners, spinning mills and textile manufacturers.
Closer coordination across the cotton value chain could improve quality consistency, supply planning and market access while helping farmers capture greater value from their produce.
The objective is not simply to increase the number of bales produced. It is to improve the quantity and quality of cotton obtained per acre while strengthening farmers’ incomes and the competitiveness of India’s textile industry.
Conclusion: Strengthening India’s Cotton Supply Chain
India’s cotton market faces a combination of domestic production risks, rising textile demand, import-policy uncertainty and changing international trade conditions.
If crop estimates weaken while textile consumption expands, imports could become increasingly important in maintaining the availability of raw materials for the domestic industry.
At the same time, expanding export opportunities could create incentives to improve productivity and strengthen links between cotton growers and textile manufacturers.
For India, the longer-term priority is to build a cotton ecosystem capable of supporting agricultural profitability and industrial growth. Improving yields, fibre quality, climate resilience and supply-chain coordination will be essential to reducing supply uncertainty.
As the 2026–27 season progresses, the balance between domestic cotton production, international sourcing and textile demand will remain a key issue for farmers, traders, spinning mills and the wider textile value chain.