Cotton Crisis: Why India’s Raw Cotton Imports Sourced Overseas Spike 80% as Domestic Crop Shrinks

India’s position as a global cotton powerhouse is facing an unprecedented strain. Driven by shrinking acreage and dipping farm yields, domestic cotton output has tumbled by over 17% over the past five years. To keep domestic textile mills running and offset a deficit exceeding 61 lakh bales, the country has been forced into a dramatic pivot toward overseas suppliers, causing raw cotton imports to surge by more than 80% in just twelve months.

Shrinking Fields and Declining Yields

Data presented in the Rajya Sabha by Minister of State for Textiles Pabitra Margherita lays bare the extent of the contraction across India’s cotton belts. Production fell from 352.48 lakh bales in the 2020–21 crop year to a provisional 290.91 lakh bales in 2025–26 (with each bale weighing 170 kg).

This supply contraction stems directly from a steady retreat by farmers. Total land dedicated to cotton cultivation shrank from 132.85 lakh hectares to 114.82 lakh hectares during this five-year window—a loss of over 18 lakh hectares. Crop productivity simultaneously slid from 451 kg per hectare down to 431 kg per hectare.

The Ministry of Textiles acknowledged that growers across key belts have increasingly shifted land away from cotton toward alternative cash crops that offer higher financial returns and fewer pest-related vulnerabilities.

Import Surge Hits Record Highs as Local Yarn Tightens

With domestic availability falling short of industrial requirements, textile manufacturers have turned heavily to foreign markets. Raw cotton imports experienced a massive jump, rising from 5,62,224 tonnes in 2024–25 to over 10.13 lakh tonnes in 2025–26—an increase exceeding 80 per cent.

The squeeze has extended into spun products as well. Cotton yarn imports rose nearly 20 per cent over the same period, climbing from 7,564 tonnes to 9,074 tonnes as downstream spinners struggled with raw fibre shortages.

*Import baseline figure reflects 2024–25 financial period.

Price Spikes Prompt Targeted Duty Relief

The domestic deficit has converged with rising price pressure both at home and abroad. International cotton benchmarks rose by roughly 19 per cent during the recent trading cycle, while domestic prices for the benchmark S-6 variety climbed by around 18 per cent.

To protect apparel exporters and mill operators from cost inflation, New Delhi has stepped in with targeted tariff relief. The government temporarily waived the 11 per cent import duty on raw cotton from 1 June through 31 October 2026. Additionally, the duty exemption on Extra Long Staple (ELS) cotton—initially introduced on 20 February 2024—remains in force to safeguard high-count yarn manufacturing.