Fashion
CAI seeks scrapping of India’s 11% cotton duty to protect industry
The Cotton Association of India (CAI) said the industry is passing through one of its worst phases, with high domestic cotton prices preventing Indian mills from benefitting from free trade agreements (FTAs) with partner countries.
India’s cotton trade body has urged the government to permanently remove the 11 per cent import duty on raw cotton, warning that high MSP, low productivity and elevated domestic prices are eroding mill competitiveness and hurting exports.
CAI said duty restoration after December 2025 could worsen unemployment, bad debts and industry stress.
High MSP, low domestic productivity and elevated input costs have made Indian cotton significantly more expensive than global prices. As a result, mills are unable to compete with international suppliers, while spinners and fabric manufacturers face continuous margin pressure. The 11 per cent duty, introduced during COVID-19, has outlived its purpose and is now distorting the market, the CAI said in a press release.
CAI warned that the industry’s distress has also begun affecting cotton traders and ginners, with delayed payments and rising bad debts across the value chain. The association noted that the only sustainable solution is to ensure the availability of competitively priced raw cotton, which requires urgent duty removal.
The press release further stated that India’s textile exports are suffering due to global recessionary conditions and uncertainty in Europe. CAI said that if raw cotton imports become costlier after December 2025, unemployment, loan defaults and financial stress across mills could intensify.
The association also linked duty removal to policy goals, noting that the Textile Ministry’s target of achieving $100 billion in textile and apparel exports by 2030 will only be feasible if mills receive raw material at competitive rates. It added that India historically had zero import duty on cotton with no adverse impact on farmers.
CAI cited abnormal seasonal rains this year, which damaged cotton quality and forced mills to depend more heavily on imports. If the duty is not removed permanently, the association cautioned that buyers may shift to rival manufacturing hubs such as Vietnam, Bangladesh, Pakistan and other markets—leading to a long-term loss of India’s global market share.
CAI president Vinay N Kotak urged the government to intervene immediately, stating that permanent removal of the 11 per cent duty is critical for the survival of the entire cotton and textile value chain. The association concluded that only with competitive raw cotton can India fully utilise FTAs, attract global orders and strengthen its position in the textile supply chain.
Fibre2Fashion News Desk (KUL)
The goal, however, is challenging due to external pressures, including stricter technical barriers, reciprocal tariffs on goods exported to the United States, and the European Union’s Carbon Border Adjustment Mechanism (CBAM) for selected industrial products.
Therefore, major export industries in the country have started restructuring and adjusting strategies early in the year to seize market opportunities.
Following a record export value of $475 billion achieved in 2025—up by 17 per cent YoY—Vietnam aims at adding nearly $38 billion to the figure in 2026.
Major export industries in the country have begun restructuring and adjusting strategies early in the year to seize market opportunities.
The textile and garment sector, which earned $46 billion in 2025, has set a target of $50 billion in exports in 2026.
The textile and garment sector, which earned $46 billion in 2025, has set a target of $50 billion in exports in 2026.
The sector is focusing on strengthening domestic supply chains, raising localisation rates and making more effective use of free trade agreements (FTAs), Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), was cited as saying by a domestic media outlet.
Exports may grow by 15-16 per cent this year, driven by market expansion and a shift towards higher-value products, according to MB Securities’ Vietnam Outlook 2026 report.
Fibre2Fashion (DS)
The data showed that the decline was driven mainly by weaker domestic exports, with goods produced in the Netherlands down 8 per cent YoY. In contrast, re-exports to the US rose 3.9 per cent during the period. Exports to the US have fallen every month on a YoY basis since July, CBS said in a press release.
Trade flows were influenced by uncertainty around US import tariffs. In the first half of 2025, trade between the two countries continued to grow, possibly as companies advanced shipments ahead of announced tariff measures.
Goods exports from the Netherlands to the United States fell 4.7 per cent YoY to €27.5 billion (~$33 billion) in the first ten months of 2025, driven by an 8 per cent drop in domestic exports, according to CBS.
Re-exports rose 3.9 per cent, while tariff uncertainty weighed on trade.
Imports from the US increased 1.9 per cent to €48.1 billion (~$57.7 billion).
Meanwhile, imports from the United States rose 1.9 per cent YoY to €48.1 billion (~$57.7 billion) in the first ten months of 2025.
Fibre2Fashion News Desk (SG)
The Philippines’ economic growth for the third quarter (Q3) of 2025 has been revised slightly lower, with gross domestic product (GDP) expanding 3.9 per cent year on year (YoY), down from the preliminary estimate of 4 per cent.
Gross national income growth for the quarter was also revised to 5.4 per cent from 5.6 per cent, while net primary income from the rest of the world was adjusted to 16.2 per cent from 16.9 per cent.
The Philippine Statistics Authority has revised down the country’s third-quarter 2025 GDP growth to 3.9 per cent from an earlier estimate of 4 per cent.
Gross national income growth was also lowered to 5.4 per cent, while net primary income from abroad eased to 16.2 per cent.
The PSA said the adjustments reflect its standard, internationally aligned revision policy.
The Philippine Statistics Authority said the revisions were made in line with its approved revision policy, which follows international standards for national accounts updates.
Fibre2Fashion News Desk (HU)
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