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India’s Cotton Crossroads: Record Imports, Farm Stress And A Shifting Textile Balance

• By  Textile Excellence
• February 15, 2026

India’s cotton economy is going through a structural shift. In 2024–25 (October–September), the country recorded cotton imports of 4.13 million bales worth ₹11,989 crore, a five-year high and nearly three times the previous year’s level. The data, shared in Parliament by Union Textiles Minister Giriraj Singh, confirms a decisive change in sourcing patterns for the world’s second-largest cotton producer.

The largest supplier was the United States, which exported 856,000 bales to India. Brazil followed closely with 854,000 bales, and Australia supplied 849,000 bales. For a country traditionally seen as cotton-surplus, this scale of imports marks a notable transition.

Why imports rose so sharply

Three forces converged to drive the surge.

First, domestic output faced pressure. Crop stress in parts of Maharashtra and other producing regions affected yields and arrivals. In Wardha district, arrivals reportedly fell 35–40% year-on-year, reflecting weather-related challenges and lower per-acre productivity. For mills dependent on steady raw material flows, reduced local arrivals meant looking overseas.

Second, landed prices of imported cotton were often lower than domestic quotes. Competitive global pricing made imports commercially attractive, especially for export-oriented spinning mills operating on thin margins.

Third, policy intervention played a role. The government waived the 11% import duty on cotton between August 19 and December 31, 2025, to ease raw material shortages. Although the duty was reinstated in January 2026, the temporary relief significantly improved import economics during the peak buying window.

The result was a sharp rise in shipments just as domestic production was under strain.

The political debate: Farmer distress vs industry need

The import spike triggered a strong debate in the Lok Sabha. MP G Kumar Naik flagged concerns that imports from Brazil had risen over 1,000% in two years, while shipments from the United States had grown about 200%. He argued that cheaper foreign cotton was depressing farmgate prices and increasing uncertainty for growers.

The government responded by reiterating its commitment to Minimum Support Price (MSP) protection. The MSP for medium-staple cotton for 2025–26 was set between ₹7,710 and ₹8,110 per quintal, based on recommendations from the Commission for Agricultural Costs and Prices.

But MSP assurance alone does not prevent market volatility. Open market prices in several mandis have hovered close to support levels, particularly as additional supply entered through imports and institutional sales.

CCI steps in: Procurement expands across states

To stabilise the situation, the Cotton Corporation of India (CCI) scaled up procurement operations.

Nationally, CCI has procured around 90 lakh bales under MSP operations in the 2025–26 season. In Karnataka, procurement rose from 5.22 lakh bales in 2024–25 to 6.82 lakh bales so far in 2025–26, with the number of centres increasing from 26 to 37. In Telangana, procurement reached 29.5 lakh bales worth ₹11,800 crore, covering 8.60 lakh farmer transactions across 122 centres.

The expansion of procurement centres, based on objective norms such as minimum cotton acreage, presence of APMCs and ginning facilities, indicates a clear attempt to deepen MSP outreach and reduce farmer distress.

However, CCI’s role does not end at procurement. It also releases cotton into the market through transparent e-auction platforms. In early 2026, increased CCI sales, combined with softer global benchmarks, contributed to renewed price pressure in domestic markets.

Global weakness adds to price pressure

International cotton markets have softened amid ample supply and moderate demand. Since Indian cotton competes globally, lower benchmark prices limit the room for domestic price increases.

The combined effect of CCI stock releases and subdued global rates has kept spot cotton prices stable to weak in several trading centres. For farmers, this creates discomfort. For mills, it offers partial relief.

The cotton economy is therefore experiencing a classic squeeze: support at the bottom through MSP, and pressure at the top through global competition.

Yarn markets show signs of recovery

While raw cotton markets remain cautious, the downstream segment tells a more optimistic story.

According to trade reports, cotton yarn prices in North India, particularly in Ludhiana, Panipat and Delhi, have strengthened on the back of export enquiries. Buyers from Bangladesh, China and parts of Southeast Asia have returned to the market after months of subdued activity.

Spinners report increased enquiries for 30s and 40s counts, and export-oriented mills are prioritising confirmed orders. With yarn availability tightening slightly and cotton prices relatively stable, mills have managed to push through selective price increases, helping restore margins.

This recovery in yarn markets suggests that demand is not collapsing; rather, it is adjusting. Export-linked segments appear to be stabilising even as raw material markets recalibrate.

The structural gap: Production vs consumption

At the heart of the current dynamics lies a widening structural gap. India remains one of the world’s largest textile and garment producers, and export ambitions remain strong. But domestic cotton production has struggled to consistently match rising fibre requirements.

When crop output falls or arrivals slow, imports quickly fill the gap. When imports rise, domestic prices soften. When prices soften, MSP procurement expands. When procurement expands, fiscal and inventory management pressures increase.

This circular cycle underscores the complexity of balancing farmer welfare and industrial competitiveness.

The road ahead

The cotton sector now stands at a delicate intersection.

For farmers, the priority is stable and remunerative pricing. Rising input costs from seeds to fertilisers and labour, make MSP operations critical. Expanded procurement in states like Karnataka and Telangana signals intent, but long-term sustainability will depend on productivity improvements and climate resilience.

For mills, competitive fibre access is essential. Export markets remain sensitive to price changes, currency movements and evolving tariff policies. Reliable and affordable raw cotton - whether domestic or imported - determines India’s ability to protect global market share.

For policymakers, the challenge is strategic calibration. Temporary duty waivers may ease short-term supply constraints, but they can also disrupt farm economics. Procurement expansion stabilises farmers but increases fiscal exposure. Market interventions must therefore balance immediate pressures with structural reform.

The import spike triggered a strong debate in the Lok Sabha. MP G Kumar Naik flagged concerns that imports from Brazil had risen over 1,000% in two years, while shipments from the United States had grown about 200%. He argued that cheaper foreign cotton was depressing farmgate prices and increasing uncertainty for growers. The government responded by reiterating its commitment to Minimum Support Price (MSP) protection. The MSP for medium-staple cotton for 2025–26 was set between ₹7,710 and ₹8,110 per quintal, based on recommendations from the Commission for Agricultural Costs and Prices.