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India is expected to purchase a record volume of cotton from farmers in the new season as prices face pressure from weaker demand and cheaper imports. U.S. tariffs on Indian textiles have reduced export orders, dragging down consumption in the world’s second-largest producer. While the government raised the minimum support price (MSP) by 7.8% to Rs.8,110 per 100 kg, market prices remain around Rs.7,000. The Cotton Corporation of India (CCI) is preparing to buy unlimited quantities if farmers sell below MSP, expanding procurement centres by 10% to 550. Imports could exceed 2 million bales by December.

 Key Highlights

* Cotton prices under pressure from U.S. tariffs and cheaper imports.

* Government hikes MSP to Rs.8,110 but prices hover near Rs.7,000.

* CCI may procure record 14 million bales from farmers.

* Procurement centres to rise 10% to 550 across India.

* Imports in December quarter may cross 2 million bales

 Cotton prices in India are facing strong downward pressure as a combination of cheaper imports and weakening textile demand weighs on the market. The imposition of hefty U.S. tariffs on Indian textile exports has severely impacted orders, with exporters reporting a sharp slowdown. The United States, which accounts for nearly 29% of India’s $38 billion textile exports, has reduced buying significantly, leaving domestic mills with excess supply.

 Despite the government’s decision to raise the minimum support price (MSP) for new-season cotton by 7.8% to Rs.8,110 per 100 kg, market rates continue to trade lower, around Rs.7,000. Industry officials fear farmers may not receive the promised support price, prompting expectations of large-scale intervention by the Cotton Corporation of India (CCI).

 The CCI, which bought a record 10 million bales worth Rs.374.36 billion in the 2024/25 season, is preparing for even higher procurement this year. Officials estimate purchases could reach 14 million bales or more, with no cap set on buying. To strengthen operations, the CCI will expand procurement centres by 10% to 550, ensuring farmers across producing states can sell at MSP.

 Adding to the pressure, India has extended its cotton import duty exemption until December, which could see over 2 million bales arriving in the December quarter. Cheaper imports combined with rising new-season arrivals are likely to keep prices subdued in the coming months, challenging both farmers and domestic mills.

 In conclusion, India’s cotton sector faces mounting pressure, but CCI’s record procurement drive is set to provide crucial support for farmers amid global trade challenges.

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