The association seeks duty-free cotton imports until 2030, citing a projected domestic shortage of around 100 lakh bales and the need for raw material security.
The Southern India Mills’ Association (SIMA) has welcomed the Government of India’s decision to extend the exemption from the 11% import duty on cotton until 31 December 2026. The exemption, which previously covered the period from 1 June to 31 October 2026, is expected to support the textile industry’s raw material requirements.
In a press release, SIMA Chairman Durai Palanisamy thanked the Prime Minister and the Union Ministers for Textiles, Commerce and Industry, Agriculture, and Finance for considering representations from the cotton textile value chain.
He said the industry imported around 72 lakh bales of cotton during the 2025-26 cotton season under temporary duty exemptions. These imports helped address the domestic shortage, avoid job losses and meet export commitments.
India Faces a Projected Cotton Shortage
India’s textile industry requires an estimated 475–500 lakh bales of cotton annually, with each bale weighing 170 kg, to support its growth ambitions. However, domestic cotton production is expected to reach only around 280 lakh bales in the 2026-27 season, compared with industry demand of approximately 360 lakh bales.
India produced 398 lakh bales during the 2013-14 cotton season, recording average productivity of 565 kg per hectare. The current production outlook points to a significant supply gap.
The country also exports around 12–15 lakh bales of organic and BCI cotton, mainly to countries such as Bangladesh. As a result, SIMA estimates that India could face a cotton shortage of around 100 lakh bales.
The association noted that India may need another seven to ten years to achieve self-sufficiency in medium and long-staple cotton. Meanwhile, the country is likely to remain dependent on imports for extra-long-staple (ELS) cotton and cotton of specific customer-required origins.
Cotton Costs Affect the Textile Value Chain
Cotton accounts for around 70% of yarn manufacturing costs, 50% of fabric manufacturing costs and 30–35% of garment manufacturing costs. SIMA said a reliable supply of cotton, in the required quality and quantity, at internationally competitive prices is essential for the industry’s growth.
The association linked raw material availability to India’s ability to benefit from recently concluded free trade agreements (FTAs), including those with the UK, EU and USA. It also highlighted the opportunities associated with the TEEM Scheme and PM MITRA Parks.
The Ministry of Textiles has set a vision to increase India’s textile trade from around US$172 billion to US$350 billion. It also aims to raise textile exports from US$36 billion to US$100 billion, attract US$100 billion in new investments and create 20 million jobs.
SIMA estimates that achieving these targets will require a stable and competitive cotton supply. It also noted that every lakh bales of cotton supports around one lakh jobs.
SIMA Cites Productivity and Technology Challenges
Palanisamy said the cotton sector faces several constraints, including restrictions on introducing and adopting advanced seed technologies and defoliants. He also pointed to the challenge of rationalising more than 2,000 approved cotton seed varieties into 20–30 high-performing varieties.
Other concerns include matching seeds to local soil conditions, improving soil fertility, managing pest infestations and helping more than six million cotton farmers adopt global agronomic practices. Weather uncertainties add further pressure to domestic cotton production.
The SIMA Chairman also highlighted difficulties faced by private seed producers in introducing the latest technology seeds through joint ventures because of licensing issues. He said the continued supply of low-yielding seeds could delay improvements in cotton productivity.
According to the figures cited by SIMA, India’s cotton productivity stands at 430–440 kg per hectare, compared with the world average of 815 kg per hectare. More than 20 countries achieve productivity levels above 1,500 kg per hectare.
SIMA Seeks Duty Exemption Until 2030
Palanisamy said cotton imports were free from import duty between 2008 and 2021, which he described as a period that supported both cotton farmers and the textile industry.
He noted that import duties were introduced when India was a net cotton exporter, shipping 30–70 lakh bales. From 2022 onwards, the Government provided temporary exemptions to address supply shortages and prevent job losses.
Against the current supply outlook, SIMA believes there is no rationale for continuing the import duty on cotton. The association has appealed to the Prime Minister to grant an import duty exemption for all varieties of cotton until 2030, followed by a review.
SIMA said a longer exemption would help curb price speculation, support price stability, maintain a level playing field and allow the industry to pursue new market opportunities arising from FTAs.
The association has also suggested that the Government periodically review domestic cotton supply and demand, along with prevailing price trends, and introduce suitable measures to protect the interests of all stakeholders.