Government Exemption Supports Cotton Prices and Farmers
The Indian government has noted a significant shift in the cotton market following the recent exemption of an 11% import duty on cotton. Since the duty was lifted, international prices for S-6 cotton have decreased from approximately 79.15 US cents per pound prior to the exemption, to about 73.95 US cents per pound by December 2025. This decline has mirrored changes in the domestic market, where cotton prices have softened from ₹57,000 per candy to around ₹52,500 per candy, closely tracking global trends.
Domestic prices are determined by various factors, including global demand and supply dynamics, exchange rate fluctuations, and the quality of cotton being traded. In the 2024–25 season, cotton imports made up about 13.93% of total domestic consumption, indicating a substantial reliance on external supplies. Currently, prices are stable, ranging between ₹51,500 and ₹52,500 per candy, allowing industries to remain competitive while ensuring farmers continue to receive Minimum Support Price (MSP) support.
MSP Support for Farmers
The government has bolstered its support for cotton farmers through the Minimum Support Price (MSP) policy, guaranteeing them a minimum return of 50% over their production costs. For the upcoming 2025–26 season, the MSP is set at ₹7,710 per quintal for medium staple cotton and ₹8,110 per quintal for long staple cotton. This represents an increase of ₹589 per quintal compared to the previous year.
To prevent distress sales among farmers, the Cotton Corporation of India (CCI) has already procured around 31.19 lakh bales, valued at ₹13,492 crore, under the MSP scheme as of December 11, 2025. This procurement has taken place across 570 centers in 149 districts spanning 11 states, ensuring that farmers are protected from price volatility and can secure fair returns.
Rise in Cotton Imports
The demand for cotton imports, particularly from the United States, has surged in recent months, aimed at fulfilling the specific quality standards of India’s textile industry, which consumes 94% of the country’s cotton. In the wake of the 11% import duty exemption, imports from the USA have aligned closely with industry needs. Overall, cotton imports have risen dramatically, going from 15.20 lakh bales in the 2023-24 season to 41.40 lakh bales in 2024-25, helping to mitigate the demand-supply gap.
This increase in imports not only ensures access to specialized cotton varieties but also supports India’s export-oriented production, uplift their competitiveness on a global scale. Importantly, the procurement operations by the CCI continue to provide necessary safeguards for farmers against adverse market conditions, reiterating the government’s commitment to supporting this crucial agricultural sector.
Recent Procurement Trends
The following table highlights the quantity of cotton procured under the MSP mechanism over the past five years:
| Cotton Season | Production (Lakh Bales) | Quantity Procured under MSP (Lakh Bales) | Procured (% of Production) |
|---|---|---|---|
| 2025-26 | 292.15 | 24.92* | 8.53* |
| 2024-25 | 297.24 | 100.16 | 33.70 |
| 2023-24 | 325.22 | 32.84 | 10.10 |
| 2022-23 | 336.60 | – | – |
| 2021-22 | 311.17 | – | – |
| 2020-21 | 352.48 | 99.33 | 28.18 |
In the cotton seasons of 2021-22 and 2022-23, prices remained above the MSP, thus reducing the necessity for MSP support among farmers. Overall, the government’s actions reflect a proactive approach to maintaining stability in the cotton market while enhancing the economic wellbeing of those who cultivate this essential crop.
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