India’s textile and apparel sector has urged the government to provide permanent duty-free cotton imports in the upcoming Union Budget 2026-27, aiming to secure stable raw material supplies and bolster global competitiveness, industry bodies said ahead of the Budget scheduled for February 1, 2026.
In detailed pre-budget recommendations, associations including the Southern India Mills Association (SIMA) and the Confederation of Indian Textile Industry (CITI) highlighted the need to remove the 11 % import duty on cotton permanently, rather than applying temporary exemptions. They said declining domestic production and supply gaps have left mills vulnerable to shortages and rising input costs, especially as mills compete with regional rivals like Bangladesh, Vietnam and Cambodia that enjoy duty-free cotton access.
Raw Material Security and Global Competition
Industry representatives pointed to sharply lower cotton output in recent seasons and stressed that reinstating import duties could worsen supply constraints, destabilize prices and erode export competitiveness. They argued that duty-free cotton imports will help stabilise input costs, support employment and enhance India’s share in global textile sales.
The textile industry also called for duty exemptions on cotton waste used widely by handloom and powerloom clusters, as well as on speciality fibres not produced domestically , to support diversified textile manufacturing. Furthermore, manufacturers want anti-dumping duties on key inputs like PTA and MEG removed, aiding movement into higher-value and technical textiles segments.
Additional Budget Requests
MSME textile units — critical to the sector’s employment footprint — have sought eased compliance norms and improved export financing facilities to ensure smoother working capital flows for shipments, particularly to key markets such as Bangladesh. Proposals also include logistics reforms to cut freight costs and faster implementation of pending technology upgradation and export incentive schemes.
With the sector contributing significantly to India’s manufacturing exports and employing millions nationwide, industry leaders say these budget measures are essential to safeguard competitiveness amid rising global input costs and tariff pressures abroad.
