Despite the Central Government’s temporary suspension of the 11% import duty on cotton, imported cotton has failed to gain a significant price advantage over domestic supplies, limiting its attractiveness for Indian textile mills, according to the latest data released by the Cotton Association of India (CAI).
The government’s decision to waive the import duty from June 1 to October 30, 2026, was aimed at improving raw material availability and easing input costs for the textile industry. However, current market trends suggest the measure has had only a limited impact on sourcing economics.
For the week ending in June, the CAI reported that the domestic ICS 105 benchmark averaged 79.50 US cents per pound on a C&F Far East basis, including freight costs of 6.00 cents per pound. During the same period, the international Cotlook A Index averaged 80.00 US cents per pound.
This left Indian cotton priced just 0.50 cents per pound lower than imported cotton, equivalent to approximately ₹400 per candy, or a price difference of only 0.63%.
The narrow gap means imported cotton offers little financial incentive for textile manufacturers, particularly after accounting for additional expenses such as freight, marine insurance, port handling charges, inland transportation, financing costs, and foreign exchange fluctuations.
With domestic and international prices remaining largely aligned, industry participants are expected to base procurement decisions on factors such as cotton quality, supply reliability, delivery schedules, and logistical efficiency, rather than marginal price differences.
The latest CAI assessment indicates that while the temporary duty exemption has improved access to imported cotton, it has not substantially altered the competitive balance between domestic and international supplies, leaving Indian cotton mills with limited economic incentive to increase imports.
