The Indian government has removed the 11% import duty on raw cotton to provide immediate relief to the textiles sector, which is facing a potential loss of more than a quarter of its export earnings due to the 50% US tariff. This decision is seen as timely, as the textiles and apparel sector, which employs over 40 million people, needs premium long-staple cotton—a variety not produced in sufficient quantities domestically—to meet its winter season demand. The duty cut is expected to help mitigate losses, save jobs, and boost demand.
The decision has raised some concerns about its impact on cotton prices before the upcoming harvest. However, cotton imports generally account for only about 5% of the total output, though this figure rose to almost 10% in the current marketing year due to a lower harvest in 2024. The US Department of Agriculture (USDA) noted that India’s cotton imports might increase because of delayed harvests caused by heavy rains in central and southern India. The article mentions that the US and Australia are among the top suppliers of cotton to India, along with Brazil.