More Stories

Informist, Friday, Jan. 2, 2026

 

By Taniva Singha Roy

 

MUMBAI – Cotton prices in the domestic market are unlikely to witness any significant recovery, despite the duty-free import window closing on Dec. 31, as there is ample carry-over stocks available and there is very little overseas demand, market participants said. There will be no significant increase in cotton prices, as imports will continue regardless of the import duty, they said.

 

The Indian government temporarily allowed duty-free imports of cotton on Aug. 19 by suspending the 11% import duty to support the textile industry, which was facing challenges from the US's 50% tariffs. Although the temporary window ended on Dec. 31, the government has not issued any statement since then, leaving the trade in limbo.  

Good-quality cotton is not available domestically, so imports are necessary, millers said. "Our issue is that we are not getting the quality cotton, and the quality cotton is available only through imports. We have represented the matter to the Ministry of Finance almost 3-4 weeks before," K. Venkatachalam, chief advisor of Tamil Nadu Spinning Mills Association, said. The Ministry of Finance has referred the duty-free import issue to the Ministry of Agriculture, and the government will announce its decision in the next few days, Venkatachalam said. 

 

India is likely to produce 30.9 million bales (1 bale = 170 kg) of cotton in 2025-26 (Oct-Sept), the Cotton Association of India said. The total supply of cotton during the year is projected at 42.0 million bales, with season-ending stock at 10.7 million bales, it said. The total supply and ending stock last year were 39.3 million bales and 6.1 million bales, respectively.

 

The duty-free import, despite opposition from cotton farmers, was a temporary measure to ensure the availability of raw materials and competitiveness for Indian textile exporters.

 

On prices, Vekatachalam said there is unlikely to be any significant change, as mills have stocked raw materials and carryover stock is available. "We have stocks for another 10-15 days. The cotton already imported is arriving and we have stocked it. So before the entire stock gets exhausted, we require an immediate decision by the government whether they are going to withdraw the exemption or not," Venkatachalam said. Arrivals are increasing, with 250,000 bales entering the market each day, so availability is not an issue. The only problem is that we are not getting the quality cotton, he said.

 

Currently, cotton prices are around INR 53,000-INR 54,000 per bale and as imports might fall because the duty free import window has closed, domestic prices could rise to INR 58,000 per bale, but only for some time as the carry over stocks for the season ending September is likely to be around 8.0 million bales to 10 million bales, Biren Vakil, founder of Pardigm Commodity Advisors Pvt. Ltd., said. 

 

Mills rely on imports as they are cheaper than buying directly from farmers. Southern mills find it more lucrative to import as they have to pay lower freight rates, Vakil said. "Importing cotton costs them INR 49,000-INR 51,000 per bale depending on the quality, which is less than buying from farmers," Vakil said.

 

Market participants said the farmers' interests will be protected even if duty-free imports continue, as the Cotton Corporation of India will purchase from them at the minimum support price of INR 7,710 per 100 kg for medium-staple cotton and INR 8,110 per 100 kg for long-staple cotton. "Even though prices are currently below the MSP, importing cotton would not affect farmers' income as the Cotton Corporation of India will buy and supply it to the required mills. That is not an issue at all," Venkatachalam said.

 

As of Dec. 24, the Cotton Corp. of India procured about 5.35 million bales of cotton at the minimum support price in the current marketing year, which started in October, up over 16% from 4.6 million bales last year, according to data accessed by Informist.

 

Around 12 million bales of cotton arrived in the market so far in the marketing year 2025-26 (Oct-Sept), said Lalit Kumar Gupta, managing director of the Cotton Corp. of India. The corporation procures cotton at the minimum support price primarily to protect cotton farmers from distress sales when market prices fall, ensuring their income security and encouraging sustained cotton cultivation to support self-reliance in this crucial raw material for the textile industry.  End

 

Edited by Saji George Titus

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.