Cotton duty policy needed to protect MSME Spinning Mills: SISPA

The South India Spinners Association (SISPA) has welcomed the Union Government’s decision to temporarily exempt the 11 per cent import duty on cotton from June 1 to October 31, 2026, but has urged the Centre to introduce a permanent and predictable policy framework to safeguard MSME spinning mills from recurring market uncertainties.
In a statement, SISPA President R. Arun Karthik said the temporary duty exemption would provide immediate relief to the textile sector. However, he pointed out that periodic exemptions do not offer a sustainable solution to the long-term challenges faced by the cotton and textile value chain.
According to SISPA, fluctuations in domestic cotton production, quality, availability and international market prices have significantly increased raw material costs for spinning mills, affecting their competitiveness and financial stability. The association noted that the repeated imposition and withdrawal of cotton import duty over the years has created uncertainty in the market and contributed to price volatility.
SISPA said small and medium spinning mills are particularly vulnerable as they generally purchase cotton only to meet immediate production requirements and lack the financial resources to maintain large inventories.
A major share of the yarn produced by these mills is sold in the domestic market, making them highly exposed to sudden increases in cotton prices.
The association highlighted that cotton prices during the 2025-26 season surged from around Rs.55,000 per candy to more than Rs.65,000-Rs.70,000 per candy. Many mills were forced to procure cotton at these elevated rates, and subsequent duty exemptions failed to offset the losses already incurred. SISPA has called on the Government of India to establish a permanent policy on cotton import duty, introduce a transparent formula-based mechanism for automatic duty suspension when domestic prices exceed international levels by a specified margin, strengthen market intervention through the Cotton Corporation of India, and ensure the availability of quality cotton at globally competitive prices.
The association said a balanced approach that protects both cotton farmers and textile manufacturers is essential for the long-term growth and sustainability of India’s cotton-textile sector.