India’s 2026-27 cotton imports to scale new peak amid crop concerns, duty relief

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Trade sources said the cotton imports for 2026-27 will equal or surpass last year’s levels of 71 lakh bales of 170 kg each

By Vishwanath Kulkarni

Updated - October 31, 2026 at 04:34 PM.

The Centre on Friday extended the customs duty exemption on cotton imports by two months till December 31, 2026, from the earlier deadline of October 31 | Photo Credit: NAGARA GOPAL

India’s cotton imports for marketing year 2026-27 (Oct-Sept) are set to hit a new high with the Centre extending the customs duty exemption till December-end, amidst concerns over the domestic crop size, which has been impacted by lower area and drought in key producing states.

Trade sources said the cotton imports for 2026-27 will equal or surpass last year’s levels of 71 lakh bales of 170 kg each, as the extension of the duty will help mills access contamination-free cotton at competitive prices. India’s cotton imports during the year-ending September 2026 are likely to have touched a record 71 lakh bales over the previous year’s 41 lakh bales.

Duty Exemption

“The duty exemption will help the Indian mills access contamination-free cotton, which will help enhance the competitiveness of our textile products against countries such as Bangladesh and China in the world market. Imports will take place as the crop is seen lower than last year," said Vinay N Kotak, President, Cotton Association of India (CAI).

The Centre on Friday extended the customs duty exemption on cotton imports by two months till December 31, 2026, from the earlier deadline of October 31, a move aimed at boosting the supply of the fibre crop to the textiles sector. The duty of 11 per cent was removed earlier from June 1 till October 31.

Atul Ganatra, CMD of Radhalakshmi Group, said the extension of the import duty waiver will definitely help the Indian textiles industry.

“India imported a record 71 lakh bales during 2025-26, when our domestic production stood at about 330 lakh bales, which indicates that consumption is very high. Looking to our current crop of around 280 lakh bales for the year 2026-27, imports should rise further. Our consumption is estimated at 365 lakh bales this year, compared with 315 lakh bales last year, and we need cotton; the imports will help bridge the gap. It is a reasonable call to extend the duty waiver till December-end,” he said.

Cotton consumption

Ganatra attributed the rising trend in cotton consumption in India to the shift in preference among textile mills from synthetic yarns to cotton yarn, noting that recent surge in crude prices due to the war has made the synthetic yarns expensive. Prices of polyester and viscose have risen by around 35 per cent after the war broke out in West Asia this year, he said.

Besides, the Indian spinning mills are seeing good demand for yarn from countries such as Bangladesh and China. Our spindle capacity is increasing due to expansions by existing players and the addition of new units in States such as Orissa, Chattisgarh, Madhya Pradesh and Gujarat, among others, he added.

Anand Popat of CotYarn Tradelink in Rajkot said the premiums on imported cotton will go up by about 1-2 cents per pound with the extension of the duty exemption. “Imports are likely to exceed last year’s levels, and demand is picking up from large buyers from both in South and Gujarat,” Popat said, adding that the domestic prices are unlikely to go down much from the current levels.

Domestic prices

Presently the domestic prices are hovering around 66,000-67,000 per candy of 356 kg. The imported price for Brazilian origin, including the charges for mill delivery, also works out to around Rs 67,000 per candy.

Popat said the multinationals who had stocked up cotton in ports near India, such as Singapore, Malaysia and Indonesia, among others, may stand to gain, while the two-month extension period will be too tight for new contracts and arrivals into the country from origins such as Brazil.

Ramanuj Das Boob, a sourcing agent in Raichur said the duty exemption is a welcome move for mills facing high domestic prices. “It will keep imports competitive and cap the domestic price rise, but if yarn realisations are weak, mills will still buy cautiously. The farmers’ interests also matter with a lower crop expected this year. The final impact will depend on the ICE Futures, the rupee’s movement against the dollar and arrivals. Ideally, the duty-free import window should have been extended by three months for smooth shipments from far origins like Brazil," he said.

While the new crop has started arriving across various markets, prices are ruling firm amid weak arrivals, likely due to a drop in yields, and farmers are holding back their produce, expecting better prices. Daily raw cotton arrivals are in the range of 70,000-80,000 bales, below the trade expectations, and arrivals may pick up post Deepavali.

Published on October 31, 2026

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