Basics
- Event/Issue: Removal of 11% import duty on cotton by the Indian government has triggered protests from farmers while being welcomed by the textile industry.
- Background/Context: India is a major global cotton producer and exporter, but rising global cotton supply, falling prices, and structural inefficiencies in the domestic cotton supply chain are creating price-parity challenges.
- Fact/Data: Cotton imports in 2024-25 jumped 77% to 5.25 lakh tonnes despite the import duty.
Relevance : GS-III (Agriculture, Textile Industry, Trade Policy, Rural Livelihoods).

Why in News
- Government lifted import duty on cotton, ostensibly to ease costs for the textile industry amid global trade pressures and high tariffs (e.g., 50% US tariffs on Indian apparel).
- Farmers oppose the move, arguing it lowers domestic prices and threatens livelihoods.
- The issue highlights structural weaknesses in Indian cotton R&D, productivity, and farm-to-firm linkages.
Significance
- Cotton is a critical raw material for India’s textile sector, one of the largest employers, especially of women.
- Price declines affect farmers’ incomes; job losses in textile manufacturing impact rural and urban livelihoods.
- Policy decision reflects tension between farmer welfare and industrial competitiveness.
Overview
- Polity/Legal: Balancing MSP, domestic procurement policies (Cotton Corporation of India), and trade liberalisation; political backlash from farmer unions.
- Governance/Administrative: Supply chain inefficiencies in farm-to-firm linkages; CCI procured 34% of production, signalling market distortions.
- Economy: Rising global supply lowers cotton prices; domestic costs are higher due to declining productivity, weak cotton-to-lint ratio, and high input costs; textile exporters face global tariff pressures.
- Society: Declining prices reduce farmer income, prompting crop shifts from cotton to paddy, soyabean, or groundnut. Job losses in women-dominated garment sector due to global supply chain adjustments.
- Environment/Science & Tech: Stagnant productivity; Bt cotton covers 95% of acreage but faces pest resistance; India lags in adoption of advanced technologies like Bollgard-III and CRISPR-based varieties.
- International: India’s cotton trade integrated with global markets; US tariffs, global price trends, and competition from Brazil, China, and Australia influence policy decisions.
Challenges
- Domestic cotton prices remain higher than global prices, causing import dependence.
- Declining acreage and productivity, with crop shifts reducing supply.
- Technological stagnation: Bt cotton over two decades old, leading to pest resistance.
- Weak public investment in R&D, lagging behind global competitors.
- Balancing farmer welfare and industrial competitiveness amid global trade dynamics.
Way Forward
- Increase public investment in cotton R&D focusing on high-yield, pest-resistant, climate-resilient varieties.
- Strengthen farm-to-firm linkages to improve supply chain efficiency and reduce costs.
- Encourage adoption of advanced biotechnology (Bollgard-III, CRISPR) in collaboration with private and international partners.
- Rationalise MSP and procurement policies to protect farmers while ensuring competitive domestic cotton for industry.
- Promote sustainable cotton cultivation practices to improve productivity and reduce input costs.
Conclusion
- India’s cotton sector faces the dual challenge of global market pressures and domestic structural inefficiencies. Policy interventions must balance farmer welfare, industrial competitiveness, and technological upgrading to ensure long-term sustainability and resilience.