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India’s cotton imports touch $1.79 billion in April-January

February 17, 2026 5 min read Economics GS3
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What Happened

  • India's cotton imports for the April–January period of FY2025-26 reached $1.79 billion (Rs 15,857 crore), an increase of 81% over the corresponding period of the previous year — a near-record import surge for a country that is itself the world's second-largest cotton producer.
  • The surge is driven by a structural production shortfall: domestic cotton output in 2025-26 is projected at approximately 30.5 million bales — the lowest in 17 years — due to crop damage from unseasonal rains in Maharashtra, Gujarat, Andhra Pradesh, and Telangana.
  • Annual domestic consumption stands at 31.5–33 million bales, creating a structural deficit of at least 2-3 million bales even before considering inventory levels and export demand.
  • India's textile industry — which employs over 45 million workers and is the second-largest export earner — is caught between high import cotton costs, weak domestic MSP alignment, and uncertain export orders following US tariff realignments.
  • The government approved duty-free cotton imports (zero tariff) for FY2025-26 to contain the cost impact on mills, though reports suggest the duty-free window is unlikely to be extended into FY2026-27.

Static Topic Bridges

India's Cotton Economy: Production, Consumption, and Global Position

India is the world's second-largest cotton producer (after China) and the largest consumer of raw cotton. Cotton is a kharif crop, sown in April–June and harvested October–February. Major producing states: Gujarat, Maharashtra, Andhra Pradesh, Telangana, Karnataka, Punjab, Haryana, and Rajasthan. Cotton production is measured in bales (1 bale = 170 kg). The Cotton Association of India (CAI) tracks crop estimates. India's raw cotton exports are primarily to Bangladesh, Vietnam, Pakistan, Indonesia, and China, while imports originate from the US (highest quality Pima/Supima cotton), Brazil, Australia, and West Africa (Benin, Burkina Faso). The gap between domestic production and consumption — when market prices are below MSP — triggers CCI's intervention and, when import costs are manageable, stimulates imports.

  • India cotton production 2025-26: ~30.5 million bales (17-year low); Cotton Association of India estimate
  • Annual consumption: 31.5–33 million bales; structural deficit: 2-3 million bales minimum
  • Cotton crop: Kharif; major states: Gujarat (30%), Maharashtra (25%), AP-Telangana (20%)
  • 1 bale = 170 kg (India standard)
  • Import sources: USA, Brazil, Australia, West Africa
  • Export destinations (raw cotton): Bangladesh, Vietnam, Pakistan, Indonesia
  • India's share of global cotton production: ~25% of world output

Connection to this news: The production shortfall — caused by weather damage to crops in the four states that contribute over 75% of India's cotton — directly explains the 81% import surge: mills that cannot source domestically at viable prices must import, even at higher cost.

India's Textile Sector: Strategic Importance and Policy Framework

The textile and apparel sector is India's second-largest export earner (after IT services) and the second-largest employer (45+ million, including 70% women). India's textile exports were approximately $35 billion in FY2024-25. Key policy instruments include: Production Linked Incentive (PLI) scheme for textile products (Rs 10,683 crore; targeting man-made fibres and technical textiles); the amended Technology Upgradation Fund Scheme (ATUFS) for mill modernisation; PM MITRA (PM Mega Integrated Textile Region and Apparel Parks — 7 parks proposed, Rs 4,445 crore outlay); and the National Technical Textiles Mission (NTTM, Rs 1,480 crore). The sector's competitiveness is acutely sensitive to raw material costs — cotton being the primary input for most of India's 2,500+ spinning mills and downstream weaving/processing units.

  • Textile and apparel exports FY2024-25: ~$35 billion
  • Employment: 45+ million workers (direct); 70% women in organised segment
  • PLI for textiles: Rs 10,683 crore; focus on man-made fibres (MMF) and technical textiles
  • PM MITRA: 7 integrated textile parks; Rs 4,445 crore; plug-and-play model
  • NTTM: Rs 1,480 crore; R&D + market development for technical textiles
  • Cotton's role: Primary input for spinning mills; ~60-65% of India's textile fibre consumption

Connection to this news: The cotton import surge directly raises input costs for India's 2,500+ spinning mills — squeezing margins and raising finished textile prices, which in turn reduces India's price competitiveness in the US and EU markets at precisely the moment when buyers are exploring alternatives to Chinese textiles due to US-China trade tensions.

MSP for Cotton and the CCI Procurement Safety Net

The Minimum Support Price for cotton is recommended by the Commission for Agricultural Costs and Prices (CACP) and approved by the Cabinet. Cotton MSP covers two grades: Medium Staple (F-414) and Long Staple (H-4). For 2025-26, the MSP implies approximately Rs 61,900 per candy, while market prices were running at Rs 52,000–54,000 per candy — a 16% gap. The Cotton Corporation of India (CCI), under the Ministry of Textiles, is the central nodal agency for MSP procurement. CCI procures from farmers when market prices fall below MSP, with no quantitative ceiling. The CCEA approved Rs 1,718.56 crore to fund CCI's procurement loss for the 2023-24 season — a recurring fiscal commitment when market prices are structurally below MSP.

  • Cotton MSP 2025-26: Rs 61,900/candy (Medium Staple F-414 equivalent)
  • Market prices (2025-26): Rs 52,000–54,000/candy (~16% below MSP)
  • 1 candy = 356 kg (India cotton trade unit)
  • CCI: Under Ministry of Textiles; procures from 11 states; 508+ procurement centres
  • CACP: Recommends MSP for 23 crops including cotton; Ministry of Agriculture
  • CCI procurement loss FY2023-24: Rs 1,718.56 crore (CCEA approved reimbursement)
  • Cotton Mission (Budget 2025-26): Rs 600 crore; 5-year programme for productivity improvement

Connection to this news: The paradox of India simultaneously importing record amounts of cotton while CCI is intervening to buy domestic cotton at above-market MSP prices illustrates the structural dysfunction: high-quality, consistent-staple imported cotton serves the mills better than variable-quality domestic cotton traded below MSP — a market signal that the Cotton Mission aims to address through productivity and quality improvement.

Key Facts & Data

  • Cotton imports April–January FY2025-26: $1.79 billion (Rs 15,857 crore); +81% YoY
  • India cotton production 2025-26: ~30.5 million bales (17-year low)
  • Annual consumption: 31.5–33 million bales; structural shortfall: ~2-3 million bales
  • Import surge drivers: Production shortfall, US textile demand, US-Brazil cotton at competitive prices
  • Duty status: Zero import duty on cotton (FY2025-26); unlikely to extend to FY2026-27
  • Textile sector: 2nd largest exporter; 45+ million workers
  • CCI MSP for 2025-26: ~Rs 61,900/candy; market: Rs 52,000–54,000/candy
  • PLI for textiles: Rs 10,683 crore (MMF and technical textiles focus)
  • PM MITRA: 7 textile parks; Rs 4,445 crore outlay