India's cotton import bill swells to USD 17.9 billion in April-January

• Duty relief and tight domestic supply push mills towards overseas cotton
  
  
• Rising imports may pressure domestic prices but support spinning margins
  
  

India's cotton import bill touched about USD 17.9 billion during April-January of the current financial year, as reported. This sharp rise signals a major shift in India's cotton trade balance. Traditionally a net exporter, India is increasingly turning to overseas markets to meet raw material requirements. Trade data and related reports from agencies such as Reuters and the USDA indicate that imports for the full 2025-26 season could reach around 4.5-5 million bales, one of the highest levels in recent years.

What happened is clear: spinning millers stepped up purchases of foreign cotton as domestic availability tightened and global prices turned competitive. Production concerns in key growing states such as Maharashtra and Gujarat reduced confidence in the crop size. At the same time, the government's decision to remove or ease the 11 percent import duty for a period significantly improved import parity. This made overseas cotton, particularly from the United States and other origins, more attractive in terms of quality and contamination parameters. As a result, shipments surged during the December quarter, and buying interest continued into early 2026.

Why did this happen? First, domestic output has been under pressure due to weather disruptions, pink bollworm incidence in previous seasons, and stagnant yields. Second, international cotton prices remained relatively softer compared to Indian spot rates for certain months, creating a clear arbitrage window for brokers and large spinning millers. Third, quality preference played a role. Fine-count yarn producers prefer longer staple and better micronaire consistency, which imported cotton can offer more reliably in some cases. For spinning millers, cheaper and better-quality imports improved yarn realization and export competitiveness. However, for ginners and farmers, rising imports during peak arrival season created concerns about price realization and stock movement.

Another layer to this development is global trade competition. Recent textile trade developments involving Bangladesh and the United States have raised concerns that regional supply chains may shift further, influencing cotton flows and yarn exports from India. If competing countries secure tariff advantages, Indian yarn and fabric exporters could face margin pressure despite lower raw material costs.

Looking ahead, import volumes may remain firm in the short term if domestic arrivals stay moderate and international prices remain attractive. However, if Indian prices correct sharply during peak arrivals, spinning millers may rebalance towards domestic sourcing. For brokers, volatility between domestic and international parity will create trading opportunities. For ginners, sustaining competitive pricing and improving contamination control will be critical. Over the medium term, improving productivity and quality at the farm level is essential to reduce structural import dependence and stabilise India's cotton trade balance.