Cotton prices jump 25% in two months; industry warns of rising yarn costs and job risks

Tamil Nadu Chief Minister C Joseph Vijay has written to Prime Minister Narendra Modi seeking immediate intervention to remove the 11% import duty on cotton, citing a growing crisis in the state’s textile and apparel industry due to sharp increases in raw material costs.

In his letter, Vijay said cotton and yarn prices have surged in recent weeks, affecting the competitiveness of Tamil Nadu’s textile sector, one of the country’s key manufacturing and employment hubs. He urged the Centre to allow duty-free cotton imports to ensure uninterrupted availability of raw material.

“This measure will enable the textile and apparel industry to remain globally competitive, enhance exports as well as protect jobs,” Vijay said in the letter.

The Chief Minister attributed the rise in cotton prices to a shortage in domestic supply and increased trading activity. He noted that cotton prices climbed from Rs 54,700 to Rs 67,700 per candy, a 25% increase in the last two months. Yarn prices have also risen from Rs 301 to Rs 330 per kg during the same period.

Vijay said that in the current scenario, continued supply of cotton can be ensured only through imports, but the 11% import duty is making overseas procurement expensive for manufacturers.

He added that duty-free imports would help textile exporters meet growing overseas commitments and remain competitive in the global market.

Highlighting the sector’s importance, Vijay said textiles and apparel is among India’s largest employment generators after agriculture and stressed the need to safeguard jobs and ensure sustainability across the textile value chain.

Meanwhile, in Coimbatore, Union Textile Commissioner Vrunda Manohar Desai said recommendations have been submitted to the Union government to completely abolish the cotton import duty or at least allow duty-free imports during the shortage period from April to September.

Desai also said proposals have been made to impose additional duties on certain categories of low-priced fabrics being imported from other countries.