MSP, import duty policies hit cotton ginning industry hard in North Gujarat, 60 out of 115 units shut

North Gujarat’s cotton industry is facing a major crisis as policy changes in MSP and import duty have severely impacted the ginning (process of separating the cotton fibers from the seeds) sector. 

In Kadi, once known as the ‘Cotton City’ of Asia 60 out of 115 cotton ginning units have already been shut, while only around 40 are operating with low capacity.

Earlier, India exported nearly 55 lakh cotton bales (compressed block of raw cotton lint), but now around 45 lakh cotton bales are being imported.

Industry players say MSP and import duty policies have severely harmed the domestic ginning industry. Since import duty has been removed, foreign cotton becomes cheaper, while domestic cotton prices remain high making local production uncompetitive.

Earlier, Gujarat’s ginning belts like Kadi and Vijapur used to be bustling hubs, attracting farmers from Andhra Pradesh, Saurashtra, Karnataka and Maharashtra to sell cotton. Today, imported cotton is cheaper, a bale from imports costs around ₹51,000, while a bale produced in Kadi costs around ₹54,000. 

As the result many ginning units are shutting their doors.

Experts say that if the government doesn’t intervene quickly, more ginning units will shut down permanently.

But if the government only increases MSP and ignores these structural issues, there will be no improvement the industry warns.