India’s Cotton Imports May Hit Record 40 Lakh Bales This Year

Ten years ago, India’s cotton production had touched 390 lakh bales, making the country a major global exporter. Today, the situation is completely reversed. In the current cotton season, imports are expected to rise to nearly 40 lakh bales, marking a record high.

By July this year, 32 lakh bales had already been imported. With deals finalized in August that are still in transit, imports will increase further. Thanks to the government’s decision to abolish import duty on cotton between August 19 and September 30, 2025, another 8–10 lakh bales are expected to enter the country during this window.

These figures highlight how rapidly India has shifted from being a major exporter to becoming an importer of cotton due to a steep decline in domestic production over the past decade. According to industry sources, imports rose from 32 lakh bales in July to 34 lakh bales by August 21. During the duty-free period, imports may rise by another 6–8 lakh bales.

The government waived the duty with the intention of providing relief to cotton mills. However, industry insiders believe mills will benefit only marginally. The problem is that importers are not receiving assurances that shipments under new deals will land within the duty-free window ending September 30. This means that large domestic traders or multinational commodity companies are positioned to benefit most from the decision.

Industry participants point out that since duty-free shipments will likely arrive only in mid-September or later, traders may choose to sell cotton after September 30. Once the duty-free period ends, an 11% import duty will again apply, making the same cotton 11% more expensive.

The biggest gainers, therefore, will be merchant importers. They will import cotton duty-free at around ₹51,000 per candy and, by holding stocks for a short period, can sell in October at a significant premium. From October onwards, the Cotton Corporation of India (CCI) will procure at the minimum support price (MSP) of about ₹61,000 per candy, giving importers a direct windfall. Based on import volumes, this additional profit could exceed ₹250 crore.

Meanwhile, CCI faces the opposite situation. Following the government’s decision to abolish the duty, CCI was compelled to reduce its selling price by ₹1,100 per candy. Earlier, CCI was selling cotton at ₹56,000–₹57,000 per candy, while imported cotton during the duty-free period is estimated to cost just ₹51,000 per candy. Fearing a decline in sales of its higher-priced stock, CCI slashed prices. However, after two consecutive cuts, it has stopped further reductions.

India’s cotton production, which once stood at 390 lakh bales, fell to 290 lakh bales last year. If imports do reach 40 lakh bales this season, that will account for nearly 12% of domestic output. The rising dependence on imports amid falling production reflects glaring shortcomings in policy and planning for the cotton sector. Although the government announced a Cotton Mission in this year’s budget to reverse the declining trend, acreage under cotton cultivation in the current Kharif season has actually shrunk by over three lakh hectares. Far from signalling recovery, this points to continuing distress in the sector.

According to the Ministry of Agriculture and Farmers Welfare, cotton is being cultivated in 107.87 lakh hectares so far in the current Kharif season. This is 3.24 lakh hectares or 2.91% less than last year's 111.11 lakh hectares. The five-year average area of ​​cotton is 129.50 lakh hectares.