Proponents of long-term trade reform advocate extending duty-free cotton imports across all categories through 2030 to establish structural cost parity. As raw cotton constitutes roughly 70 per cent of yarn production expenses and 35 per cent of garment manufacturing costs, unpredictable tariff shifts directly impair export pricing models. Extended policy visibility through 2030 is necessary for spinning mills and garment makers to sign high-volume sourcing agreements with global retailers, emphasizes Durai Palanisamy, Chairman of the Southern India Mills’ Association.
Though the Ministry of Finance's recent Notification No. 35/2026-Customs extended the 11 per cent customs duty waiver on raw cotton imports through December 31, 2026, industry leaders warn, short-term relief fails to support multi-year global supply contracts. With domestic cotton production projected at 280 lakh bales against industrial consumption of 360 lakh bales - and additional export commitments of organic cotton further stretching supply - the structural deficit approaches 100 lakh bales.
Agronomic yield gaps mandate import dependency
Domestic agricultural constraints continue to limit raw material self-sufficiency. India’s cotton yield stands at approximately 430–440 kg per hectare, remaining significantly below the international average of 815 kg per hectare due to seed technology bottlenecks and weather vulnerabilities. Sustained duty-free access allows manufacturers to leverage upcoming Free Trade Agreements while preserving domestic employment across downstream yarn, fabric, and apparel networks.
Helping India achieve $100 billion national export target
Based in Coimbatore, The Southern India Mills' Association, based in Coimbatore, represents spinning mills and textile manufacturers across South India. The organization advocates trade policies, raw material access, and industrial modernization. Its strategic initiatives focus on raw material security and competitiveness to help India achieve its $100 billion national textile export target.
