Government decision - Duty-free cotton import now till December, farmers' problems may increase
New Delhi. The central government has recently taken a big decision, which has drawn lines of worry on the faces of cotton farmers. The government has extended the deadline for complete waiver of duty on cotton imports. Earlier this exemption was only till 30 September 2025, but now it has been extended till 31 December 2025. The main objective of this decision is to provide cheap raw material to the textile industry and exporters, so that they can compete better in the international market. But experts say that this can cause great harm to domestic farmers, as local prices may fall due to cheap foreign cotton coming into the market.
This decision comes at a time when the US has imposed a 50 percent duty on some products imported from India. Just a day after this, the Indian government took this step. The government argues that this will increase textile exports and benefit the economy. But farmer organizations and experts have raised questions on this. They say that the government has forgotten its own old promises. Earlier, when duty-free imports were announced, the government had said that it would last only till September, because the new cotton season will start from October. Then the farmers' crop will come to the market and cheap imports will not affect their earnings. But now this decision has been reversed, which seems like a betrayal for the farmers.
Cotton is an important crop for India. About 30 million bales of cotton are produced in the country every year. But production has been decreasing in the last few years. Earlier, where the production was up to 39.9 million bales, now it has remained around 30 million bales. The domestic textile industry needs 31.5 million bales, so imports have to be made. But duty-free imports make foreign cotton cheaper, which can spoil the hard work of local farmers. Industry experts say that the price of cotton in the international market is around Rs 51,000 per candy, while in the domestic market it was selling for Rs 56,000 to Rs 57,000. Now prices may fall due to increased imports.
Just two days after the announcement of the decision, the Cotton Corporation of India (CCI) cut prices by Rs 1,100 per candy. CCI is a government agency that buys cotton from farmers and sells it in the market. Earlier, imports were expensive due to the duty, which included 10 percent import duty and 10 percent agricultural infrastructure cess. The total duty was 11 percent. But now it is completely waived, so importers can order cotton in large quantities. Earlier, when there was only a 40-day exemption, importers were hesitant. But now with a longer period of three months, they can place more orders.
How will this affect farmers? CCI is able to buy only 1 crore bales of cotton every year, while the total production is 3 crore bales. The rest of the cotton is sold in the open market. If market prices fall, farmers will not even get the minimum support price (MSP). The MSP in the new season is Rs 61,000 per candy, but market rates may remain below this due to cheap imports. Experts estimate that if there is a difference of Rs 10,000 per candy, CCI and farmers may lose a total of Rs 15,000 crore. This amount is very large, which will directly affect the lives of farmers.
A cotton expert said that this decision of the government is in the wrong direction. He says that it is not right to increase duty-free imports to help exporters. Instead, the government could have given direct incentives to exporters, such as subsidies or other schemes. Textile exporters already had to pay only 3 percent effective duty, which is very low. But now by giving complete exemption, the interests of farmers have been ignored. Experts say that it is wrong to allow cheap imports in the important marketing season, when farmers' crops come to the market. Not only will this affect farmers, but the domestic textile industry will also benefit, but that too at the cost of farmers.
This decision is also important in the context of international trade. India's trade talks with the US have been going on for a long time. The US has been demanding India to open markets for agricultural products. But India has always said that it will not compromise on the interests of farmers, dairy and fishermen. Still, this duty-free import decision may increase the difficulties of farmers. Interestingly, India was once a big exporter of cotton, but now it has become a net importer. There are many reasons behind the decrease in production, such as bad seeds, pest attacks and weather. This year, the area under cotton cultivation has decreased by 3 lakh hectares in the Kharif season. If farmers do not get a good price, they may turn to other crops, such as soybean or groundnut. This will further weaken the cotton industry.
The Prime Minister often talks about "swadeshi" and self-reliant India. But this decision seems to be the opposite of that. It is not right to weaken domestic production by promoting foreign cotton. Farmer organizations had already protested when the exemption was only till September. Now extending it till December may further intensify the protests. Many associations have threatened demonstrations. The government may also face difficulties politically, as farmers are a large part of the vote bank.
Overall, this move of the government is an attempt to strengthen the textile industry, but farmers have been ignored in this. There is a need for the government to adopt a balanced policy, where the interests of both exporters and farmers are protected. If this does not happen, cotton farmers may get more upset, and the country's agriculture sector may weaken. It is hoped that the government will reconsider this and listen to the voice of the farmers.
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