Textile bodies seek relief to deal with cotton price surge

CHENNAI: The textile industry has raised concerns over a sharp increase in cotton prices in the past two months and tightening domestic supply, along with heightened raw material and logistics costs, could adversely impact the industry, hard-hit by US tariffs last year.

Neeraj Jain, managing director of Vardhman Textiles, raised concerns about domestic supply during the company's latest earnings call and flagged the risk of a cotton shortage starting in August. Also, during the analyst call, Arvind Ltd's management said that higher input costs, especially from cotton prices, could exert pressure on margins in the first half of the year, and that it has proactively locked in long-term prices and secured a significant portion of raw materials to manage the inflationary environment. Exporting units of various sizes and industry bodies have demanded that the Union Government provide an exemption from 11% cotton duty at least till December amid a sharp rise in prices and a weakening rupee. Manufacturing units say the price hike pushes up the cost and makes them less competitive with other key hubs.

"Many competing Asian countries, such as Bangladesh and Vietnam, have zero duty access. A sustained domestic supply gap and higher prices force Indian textile manufacturers and exporters to battle higher input costs, especially at a time of growing orders from key markets. Some of the units cannot accept orders with certainty, " said Dr A Sakthivel, vice chairman of the Apparel Export Promotion Council. This severely impacts Indian units' flexibility and erodes their market share in price-sensitive markets and segments, he added.

Domestic cotton production is projected to drop to 291 lakh bales against the consumption demand of 328 lakh bales, leaving a deficit of 37 lakh bales, a report by the Confederation of Indian Textile Industry (CITI) noted. Dr K Venkatachalam from Tamil Nadu Spinning Mills Association said the supply crunch is more severe than the headline figures indicate and alleged hoarding by traders. He said it would take 45 days to get imports, and govt should make efforts to import cotton on time before it becomes an acute shortage.

Apparel exports declined 11.66% on a yearly basis in April 2026, while combined textile and apparel exports declined 3.42%, as per Texprocil data.