Textiles industry seeks zero duty on cotton imports, more export incentives to beat headwinds

Urging the Finance Ministry for short-term support to factories catering to the US market, Confederation of Indian Textile Industry (CITI) Chairman Ashwin Chandran sought temporary relief on working capital to address challenges arising from tariffs and order cancellations.

He called for an increase in export incentives such as duty drawback, RoSTCL, and RoDTEP, noting that while 25–50% tariffs cannot be fully offset, partial relief would aid exporters to the United States.

Chandran described the previous cotton season as challenging for both the government and the industry, telling CNBC-TV18 that the Cotton Corporation of India has nearly liquidated all stocks procured last season.

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Praising the government’s decision to remove import duty on cotton until the end of 2025, he urged that the move be extended to ensure a level playing field and allow mills to source cotton globally.

He pointed out that only $40 billion of India’s $180 billion textile sector comes from exports, and while the proposed Free Trade Agreement with the UK could help, diversification remains difficult due to lengthy supply chains and weak growth in developed economies. Increasing export share would mean replacing competitors in stagnant markets, he said.

With global cotton stocks ample and strong crops expected in the US, Brazil, West Africa, and Australia, Chandran said the industry foresees a stable period ahead in terms of availability, pricing, and quality. However, he emphasised that despite higher Minimum Support Prices aligning Indian cotton rates with global levels, the country must strengthen dyeing and processing capacity for man-made fibres - a persistent weak link in the textile value chain.