The Confederation of Indian Textile Industry (CITI) released the Gherzi-ICAC study in Coimbatore, highlighting the impact of cotton import duty and low productivity on the competitiveness of India’s textile sector. The report called for stable cotton policies and improved productivity to support industry growth.
Coimbatore: The Confederation of Indian Textile Industry (CITI) on Thursday released a comprehensive study on India’s cotton sector, jointly prepared by Gherzi, a textile management consulting company, and the International Cotton Advisory Committee (ICAC). The report highlights the adverse impact of cotton import duty and low productivity on the competitiveness of India’s textile industry.
Addressing media persons at the SIMA office in Race Course, Coimbatore, CITI Chairman Ashwin Chandran said the study examines the structural dynamics shaping cotton production, pricing, trade policy, and the competitiveness of the textile value chain.
The study, titled “Economic Analysis of Cotton Supply, Pricing, and Trade Policy in India,” noted that the 11% import duty on cotton has negatively impacted the textile and apparel sector. It stressed the need to ensure predictable access to imported cotton during supply shortages in order to safeguard the long-term competitiveness of the industry.
The report also recommended improving fibre quality and aligning domestic market conditions with global benchmarks to support both farmers’ livelihoods and industry growth.
According to the study, the textile and apparel industry has the potential to achieve the ambitious target of $350 billion by 2030, including exports worth $100 billion by the end of the decade. The report underlined that a strong textile sector can become the “farmer’s strongest customer” in line with the government’s 5F vision.
The Gherzi-ICAC report observed that ad hoc relief measures on import duty have had limited impact. While the import duty on cotton was temporarily waived between August and December 2025, it was reinstated on January 1, 2026.
“A stable and predictable policy is imperative to allow mills to sustain operations and fulfil market demand. There is a need to withdraw the import duty on cotton and allow mills access to cotton at competitive prices,” the report stated, adding that competing Asian countries enjoy duty-free access to international cotton markets, putting India at a disadvantage.
On productivity, the report said long-term policy measures should address the fundamental constraints faced by the cotton sector to improve yields and ensure the economic viability of cotton cultivation. It pointed out that stagnant yields increase per-unit production costs and reduce farmers’ ability to benefit from market opportunities.
The report further recommended the creation of an institutional mechanism to stabilise cotton prices and reduce the impact of speculation across the value chain. It suggested introducing a Cotton Price Stabilization Fund scheme with a 5% interest subvention to ease working capital pressures during the peak procurement season from November to March.
Addressing media persons at the SIMA office in Race Course, Coimbatore, CITI Chairman Ashwin Chandran said the study examines the structural dynamics shaping cotton production, pricing, trade policy, and the competitiveness of the textile value chain.
The study, titled “Economic Analysis of Cotton Supply, Pricing, and Trade Policy in India,” noted that the 11% import duty on cotton has negatively impacted the textile and apparel sector. It stressed the need to ensure predictable access to imported cotton during supply shortages in order to safeguard the long-term competitiveness of the industry.
The report also recommended improving fibre quality and aligning domestic market conditions with global benchmarks to support both farmers’ livelihoods and industry growth.
According to the study, the textile and apparel industry has the potential to achieve the ambitious target of $350 billion by 2030, including exports worth $100 billion by the end of the decade. The report underlined that a strong textile sector can become the “farmer’s strongest customer” in line with the government’s 5F vision.
The Gherzi-ICAC report observed that ad hoc relief measures on import duty have had limited impact. While the import duty on cotton was temporarily waived between August and December 2025, it was reinstated on January 1, 2026.
“A stable and predictable policy is imperative to allow mills to sustain operations and fulfil market demand. There is a need to withdraw the import duty on cotton and allow mills access to cotton at competitive prices,” the report stated, adding that competing Asian countries enjoy duty-free access to international cotton markets, putting India at a disadvantage.
On productivity, the report said long-term policy measures should address the fundamental constraints faced by the cotton sector to improve yields and ensure the economic viability of cotton cultivation. It pointed out that stagnant yields increase per-unit production costs and reduce farmers’ ability to benefit from market opportunities.
The report further recommended the creation of an institutional mechanism to stabilise cotton prices and reduce the impact of speculation across the value chain. It suggested introducing a Cotton Price Stabilization Fund scheme with a 5% interest subvention to ease working capital pressures during the peak procurement season from November to March.