Spinning mills urge Centre to scrap 11% cotton import duty permanently

Spinning mills in southern India have asked the Union government to permanently remove the 11 per cent import duty on cotton, arguing that the levy adds to volatility in raw material prices and hurts the entire textile value chain.

Durai Palaniswamy, who was re-elected chairman of the Southern India Mills' Association (SIMA) at its annual meeting on Tuesday, said in a statement that curbing speculation in raw material prices was essential to provide a level-playing field for the industry, from ginning to garmenting.

"Curbing speculation in the raw material prices is essential to provide a level-playing field for the entire textile value chain," he said. He also urged the government to check the import parity price policy followed by the Cotton Corporation of India (CCI) and by participants in the cotton trade.

The CCI is a public sector undertaking under the Ministry of Textiles that procures cotton at the minimum support price and sells it in the open market, a role meant to protect growers when prices fall and to steady supplies when they rise.

Mr. Palaniswamy suggested that the government consider recasting the CCI's role on the lines of the China National Cotton Reserves Corporation, which holds more than a year's stock of cotton and intervenes in the market to keep prices stable.

India levies a basic customs duty on cotton imports, which with the social welfare surcharge works out to an effective rate of about 11 per cent. The duty has been waived temporarily in some years, including a duty-free window in 2022, but the industry has consistently sought a permanent exemption rather than recurring short-term measures.

India is among the world's largest producers of cotton and a major exporter of yarn and textiles, and the sector is a significant source of employment, particularly in States such as Tamil Nadu, Gujarat, Maharashtra and Punjab. Mill owners argue that unpredictable swings in raw material costs make it difficult to commit to long-term contracts and to compete in export markets.

Looking ahead, Mr. Palaniswamy said the Indian textile industry was entering a new phase of transformation in which diversification, technology adoption, sustainability and value addition would be the key drivers of long-term global competitiveness.

"The future growth of the Indian textile industry will depend not only on expanding capacity, but producing high value products with greater efficiency through innovation, productivity, advanced technology, sustainability and market diversification," he said.

At the annual meeting, S. Krishnakumar, Managing Director of Sulochana Cotton Spinning Mills, Tiruppur, was re-elected deputy chairman of SIMA, and K. Sivaraj, Managing Director of Sivaraj Spinning Mills, was re-elected vice-chairman for 2026-27.

The association also held the annual meeting of its research wing, the SIMA Cotton Development & Research Association (SIMA CDRA). S.K. Sundararaman, Managing Director of Shiva Texyarn Limited, Coimbatore, was re-elected its chairman for 2026-27. Durai Palanisamy, Executive Director of Pallava Textiles P Limited, Erode, was re-elected deputy chairman of SIMA CDRA, while K. Krishnakumar will continue as its vice-chairman.