India

SISPA seeks permanent policy on cotton import duty

Anthony Williams जून 2, 2026

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SISPA Advocates for Permanent Cotton Import Duty Policy

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Temporary Exemption Welcomed by SISPA

The South India Spinners Association (SISPA) has acknowledged the government’s decision to temporarily remove the 11% import duty on cotton, effective from June 1 to October 31, 2026. While this move provides short-term relief, the association stresses the need for a more sustainable approach to address long-term challenges in the cotton and textile sectors.

“The temporary exemption is a positive step, but recurring adjustments to the import duty regime fail to offer lasting stability,” remarked a SISPA representative.

Challenges in the Cotton Value Chain

Small and medium spinning mills remain vulnerable to cotton price swings, which disrupt their operational efficiency. Fluctuations in domestic production levels, fiber quality, and availability, coupled with international market dynamics, have driven up raw material costs. This, in turn, undermines the competitiveness and sustainability of local textile manufacturers.

Periodic changes to the import duty policy have introduced unpredictability into the market. These shifts often benefit intermediaries and investors, who can capitalize on price volatility, while spinning mills and producers face financial strain. The lack of a consistent framework has made it difficult for businesses to plan investments or manage inventory effectively.

Impact of Price Fluctuations

Small-scale spinning mills typically purchase cotton to fulfill immediate production needs, lacking the resources to stockpile large quantities. This practice makes them highly susceptible to market price spikes. During the 2025–26 season, cotton prices surged from approximately ₹55,000 to over ₹65,000–₹70,000 per candy, forcing mills to buy at higher rates despite reduced profit margins.

Such volatility has also affected the domestic market, where yarn from small mills is primarily sold. The elevated costs have squeezed margins, leading to concerns about the sector’s ability to sustain growth. SISPA argues that this instability threatens the entire value chain, from farmers to manufacturers, and demands a more proactive solution.

Call for a Predictable Duty Framework

SISPA has urged the government to implement a permanent policy that ensures consistency in the cotton import duty. The association proposes a formula-driven mechanism to automatically suspend the duty when domestic cotton prices fall below international benchmarks. This would help stabilize costs and reduce uncertainty for industry players.

A structured approach is essential to balance the interests of all stakeholders. Farmers need fair remuneration for their produce, while textile manufacturers require reliable access to quality raw materials. By creating a transparent system, the government can foster a more resilient and competitive industry.

“A permanent policy would safeguard the livelihoods of farmers and the operational stability of spinning mills, ensuring long-term growth for the textile sector,” emphasized SISPA.

Role of Regulatory Bodies

The association highlighted the importance of agencies like the Cotton Corporation of India (CCI) in managing price fluctuations. By implementing effective intervention mechanisms, the CCI could play a key role in maintaining competitive pricing and quality standards. SISPA suggests that such initiatives should be integrated into a broader policy framework to enhance market transparency.

They also stress the need for a regulatory mechanism that aligns with global market trends. This would enable Indian textile producers to remain competitive while supporting domestic farmers. A predictable duty policy could act as a catalyst for this balance, ensuring the industry’s continued growth.

Broader Implications for the Industry

SISPA believes that a stable policy will benefit the entire ecosystem of the cotton-textile industry. With millions of workers relying on this sector, any disruption in raw material supply or pricing could have cascading effects on employment and economic activity. The association calls for a comprehensive strategy that addresses these interdependencies.

By establishing a formula-based duty system, the government can create a more dynamic and responsive framework. This would allow for adjustments based on real-time market data, ensuring that the duty neither stifles imports nor disadvantages domestic producers. Such a policy would also promote investment in the sector, encouraging innovation and expansion.

Conclusion and Future Outlook

The association concluded that the cotton-textile industry requires a long-term solution to its current challenges. A permanent duty policy would provide clarity for businesses, reduce financial risks, and support sustainable growth. SISPA is hopeful that the government will prioritize this issue, recognizing the importance of stability in the industry’s development.

With the right policy in place, India’s cotton sector can thrive, ensuring both farmers and manufacturers benefit. The temporary exemption is a step in the right direction, but it must be followed by a more permanent and structured approach to fully address the sector’s needs.

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