India’s Cotton Imports in 2026-27 May Match or Exceed Record 71 Lakh Bales

Extended customs duty exemption, lower domestic crop estimates and rising mill consumption are expected to drive import demand

India’s cotton imports during the 2026-27 marketing year (October-September) could match or exceed the record 71 lakh bales imported in 2025-26, according to trade sources. The Centre’s decision to extend the customs duty exemption until December 31, 2026, comes amid concerns over domestic crop availability following reduced acreage and drought conditions in key producing states.

The extension is expected to help textile mills access contamination-free imported cotton at competitive prices. Industry participants also point to rising cotton consumption, demand for yarn from export markets and higher prices of synthetic fibres as factors supporting import demand.

Customs Duty Exemption Extended Until December 31

The Centre extended the customs duty exemption on cotton imports by two months, from the earlier October 31 deadline to December 31, 2026. The 11% import duty had previously been removed for the period from June 1 to October 31.

Vinay N Kotak, President of the Cotton Association of India (CAI), said the exemption would help Indian mills access contamination-free cotton and improve the competitiveness of textile products against countries such as Bangladesh and China.

“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," he said.

India’s cotton imports during the year ending September 2026 are likely to have reached a record 71 lakh bales, compared with 41 lakh bales in the previous year.

Atul Ganatra, CMD of Radhalakshmi Group, said the extension of the import duty waiver would support the domestic textile 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 Rises as Synthetic Fibres Become Costlier

Ganatra attributed the increase in cotton consumption to a shift in preference among textile mills from synthetic yarns to cotton yarn.

He said the recent rise in crude oil prices following the war in West Asia had made synthetic yarns more expensive. Prices of polyester and viscose have increased by around 35% since the war broke out in the region this year.

He also pointed to strong yarn demand from countries such as Bangladesh and China. According to Ganatra, India's spinning capacity is expanding through investments by existing companies and the addition of new units in states including Odisha, Chhattisgarh, Madhya Pradesh and Gujarat.

Imported Cotton Premiums and Domestic Prices

Anand Popat of CotYarn Tradelink, Rajkot, said premiums on imported cotton could increase by around 1-2 cents per pound following 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 domestic prices were unlikely to decline significantly from current levels.

Following the announcement of the extension, domestic cotton prices eased by around ₹500 per candy of 356 kg, trading in the range of ₹65,700-66,200.

Ramanuj Das Boob, a sourcing agent in Raichur, said the market had softened after the announcement.

“The market is easy and has come down by ₹500 per candy on Monday and buyers are even quoting less,” he said.

The Cotton Corporation of India also reduced its sale prices by ₹400 on Monday for the 2025-26 crop.

Raw Cotton Prices Remain Above MSP

Raw cotton prices have eased slightly but continue to remain above the minimum support price (MSP) of ₹8,267 per quintal. Arrivals remain limited as farmers hold back their produce.

Prices in key producing regions were reported as follows:

Daily raw cotton arrivals are estimated at 70,000-80,000 bales, below trade expectations. Arrivals could increase after Deepavali.

The imported price of Brazilian cotton, including charges for delivery to mills, works out to around ₹67,000 per candy.

Tight Import Window May Benefit Existing Stocks

Popat said multinational companies that had stocked cotton at ports near India, including Singapore, Malaysia and Indonesia, could benefit from the extended duty-free period.

However, he indicated that the additional two months could be insufficient for new contracts and shipments from distant origins such as Brazil.

Das Boob described the duty exemption as a welcome move for mills facing high domestic cotton prices. He said the measure could keep imports competitive and limit further increases in domestic prices, although mills may remain cautious if yarn realisations are weak.

He also noted that farmers’ interests would need consideration amid expectations of a smaller domestic crop. The final impact, he said, would depend on ICE Futures prices, movements in the rupee against the US dollar and domestic arrivals.

“Ideally, the duty-free import window should have been extended by three months for smooth shipments from far origins like Brazil," he said.

Industry Highlights Need to Improve Cotton Productivity

Meanwhile, Rajesh Aggarwal, Managing Director of Insecticides (India) Limited and Vice-Chairman of the Crop Care Federation of India, highlighted the importance of improving cotton productivity and yields.

“Enhancing cotton productivity and ensuring better yields require a proactive approach that combines timely pest identification, effective crop protection, and informed on-field decision-making.”

India’s cotton import outlook for 2026-27 will therefore depend on domestic crop availability, mill consumption, international prices and the pace of shipments during the extended duty-free period.