India’s Cotton Imports Surge 158% YoY in December Quarter Amid Duty-Free Import

India’s cotton trade dynamics shifted sharply in the December quarter as a temporary duty exemption triggered a surge in imports, reshaping both domestic pricing trends and global market expectations. 

Duty-Free Policy Drives Import Spike 

Cotton imports rose 158% year-on-year to an all-time quarterly high of 3.1 million bales during the December quarter, following the government’s decision to waive the 11% import duty for the period.  

The policy move accelerated overseas buying by domestic mills at a time when local prices were firming up due to crop damage concerns. 

For the full 2025–26 marketing year, imports are now projected to rise 22% to a record 5 million bales. Last season, inbound shipments stood at 4.1 million bales, sourced largely from the US, Brazil, Australia and African origins. 

Crop Estimates Revised Up, Consumption Weakens 

Domestic supply conditions have shown some improvement. Cotton output for the current season has been revised upward to 31.7 million bales, supported by better-than-expected production in Maharashtra and Telangana. This compares with an earlier estimate of 30.95 million bales. 

However, demand-side pressures persist. Cotton consumption is expected to decline 2.9% to 30.5 million bales in 2025–26, reflecting subdued overseas demand for Indian yarn, fabric and apparel. 

Export Headwinds Add Pressure 

The demand slowdown comes amid rising trade frictions. The US, which accounts for nearly 29% of India’s $38 billion annual textile exports, has raised tariffs on Indian textile imports to as high as 50% from August, intensifying pressure on export-linked consumption. 

Read More: India’s Textile Exports Rise 7% in FY25, Reaching $21.35 Billion! 

Conclusion 

While duty-free imports have eased raw material availability and supported global prices, softer consumption and export headwinds may cap upside for domestic cotton markets in the near term. 

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