Cotton Duty Cut Dispute: Concerns Over Farmers' Interests
By yash chouhan 2026-04-29 11:19:23
Trade Divided Over Cotton Duty Cut; Risks Identified for Farmers: CCI
Differences regarding a reduction in cotton import duties appear to be deepening. While millers and the textile industry are demanding a duty cut in light of rising domestic prices, a section of the trading community has termed this a risky move for farmers.
Currently, an import duty of approximately 11% is applicable on cotton in India, effective since January 1, 2026. Although the government and the industry are considering a reduction in this duty due to a sharp surge in prices, many traders remain opposed to the idea. They believe that lowering the duty at this juncture could adversely affect the interests of farmers.
According to traders, many farmers are currently withholding their produce in the hope of securing better prices—a stock estimated to amount to approximately 4 million bales (one bale = 170 kilograms). Under these circumstances, if imports become cheaper, it would exert downward pressure on prices in the domestic market, potentially causing financial losses for farmers.
A senior trader warned that on the previous occasion when import duties were reduced, nearly 3 million bales of cotton were imported within a span of just three months. Consequently, domestic demand began to be met through imports, forcing farmers to sell their crops below the Minimum Support Price (MSP).
Experts believe that if the duty is reduced under the current circumstances as well, a similar situation could recur—particularly for those farmers who have held back their produce in anticipation of better prices.
