- Government raises MSP by 8%, opens procurement centres
- Climate, productivity challenges adversely impact industry
Cotton prices have plummeted to a four-year low of around INR 26,100/bale (2025 average till date, lowest since 2021) in both domestic and global markets, prompting the Indian government to announce a significant package of measures aimed at stabilising the sector and supporting vulnerable farmers.
The government has responded to the crisis by immediately opening 550 procurement centres across 11 cotton-growing regions and removing the import duty on cotton fibre until the end of the calendar year. Furthermore, the minimum support price (MSP) for cotton has been increased by 8% for the current season to provide a crucial market incentive. Procurement is scheduled to roll out regionally, beginning with the northern zone on 1 October.
Despite the intervention, the industry faces severe challenges, including the impact of climate change, reduced crop yields, and waterlogging. The situation is particularly dire for small farmers, who account for up to 75% of cotton growers and lack the means to hold their stock without timely government procurement. Industry leaders warn that a lack of MSP access could lead to a reduction in cotton sowing area next year.
The government has set a target to exceed last year’s procurement levels, emphasising its commitment to supporting both the textile industry and the farming community through this difficult period.
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