India’s cotton duty waiver threatens price crash, opens door for U.S. shipments

Farmer groups in Gujarat and Maharashtra have already criticised the move as anti-farmer. With state elections approaching, the optics of privileging mills and foreign exporters over growers could be damaging.

Representative Image. / Canva

India’s surprise move to suspend import duties on cotton for 40 days is set to unsettle its cotton economy, pushing down domestic prices and squeezing farmers, while giving American exporters a valuable opening in a market where they have been struggling to expand.

On August 18, the Finance Ministry scrapped the combined 11% levy—5% basic customs duty plus 5% agriculture infrastructure cess—on raw cotton imports between August 19 and September 30. The waiver, billed as a temporary step to help textile mills cope with high raw material costs, comes just weeks before the new harvest, raising fears of a sharp market correction.

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