Textile industry flags risks from cotton MSP hike
While aimed at supporting farmers, the hike has sparked concern among Gujarat's textile industry, which fears that higher raw material costs will erode India's competitiveness in the global market.
Industry leaders argue that enhancing cotton productivity, rather than simply raising MSP, offers a more sustainable path for increasing farmers' incomes without straining manufacturers. "India holds 37% of global cotton acreage but contributes only 23% to production," said Jayesh Patel, senior vice-president of the Spinners' Association of Gujarat.
"Focusing on yield improvement is key if India wants to lead globally.
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Manufacturers are also seeking the removal of import duties on cotton. "Indian cotton is now the costliest globally, which directly affects our competitiveness," said Bharat Chhajer, former chairman of PDEXCIL. "At a time when global brands are considering India as an alternative to Bangladesh, expensive cotton makes us less viable."
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According to cotton trader Arun Dalal, the revised MSP structure incentivises farmers to supply better-quality cotton through price linkages based on moisture content. "Sowing activity picked up this season, and higher arrivals could help farmers secure better returns," he said. However, Dalal warned that sustained high cotton prices may put further pressure on spinning units and yarn manufacturers already grappling with weak demand and shrinking margins.
Industry experts are urging the govt to balance farm support with safeguards for the textile sector. Removing import duties, boosting productivity, and easing logistics costs remain key demands.
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