India’s Cotton Conundrum: When Policy Turns Farmers Into Casualties
Cotton, India’s ‘white gold’, is not just a crop. It is the lifeline of 60 lakh farmers, the foundation of a 4.5 crore-strong textile workforce, and the thread that ties together India’s heritage of handlooms with its global aspirations in apparel exports. Yet today, this lifeline is fraying fast – not because of nature, but because of policy.
On August 6, the US slapped a brutal 50% tariff on Indian cotton exports, a move that has left farmers, spinners and weavers staring at disaster. Instead of cushioning this blow, the Indian government made a stunningly contradictory move: it scrapped the 11% import duty on foreign cotton, effective August 19 to September 30.
In one stroke, India opened the floodgates for cheap cotton imports from countries like Australia and Egypt – even as its own farmers and exporters are set to collapse under the double whammy of US tariffs and domestic price crashes.
The immediate impact was visible. Cotton prices fell by 4% within days of the duty removal. The Cotton Corporation of India slashed its price benchmark by Rs 1,100 per bale. For farmers who were already selling below the minimum support price (MSP), this was nothing short of a death knell.
Numbers that tell a grim story
Around ten lakh farmers in Telangana alone are on the brink, with each of them standing to lose tens of thousands of rupees this season. Rs 74,648 crore worth of cotton and garment* exports to the US now face being wiped out by tariffs. India’s cotton production has already fallen 24% over the last decade, while imports have surged 73%.
Thirty-five lakh handloom weavers – custodians of India’s cultural fabric – stand to lose livelihoods as mills slash yarn purchases.
Across sectors, India could lose $25.3 billion (Rs 2.17 lakh crore) in exports to the US because of the 50% tariff, with textiles alone bearing nearly half that burden.
And let’s not forget the chilling human toll: in a country where 31 farmers or farm workers die by suicide every day, another round of price crashes could turn a crisis into a catastrophe.
Hollow rhetoric vs harsh reality
The prime minister has boasted about being ready to “pay a heavy personal price” to protect Indian farmers. But farmers don’t need rhetoric; they need remunerative prices. They need MSP based on the Swaminathan Commission’s C2+50% formula – Rs 10,075 per quintal. Instead, they are offered only Rs 7,710 for medium staple cotton.
That Rs 2,365 gap per quintal is not just a number; it is the difference between survival and despair.
Meanwhile, the government’s decision to lift import duties reveals a shocking inconsistency. On the one hand, it claims to “Make in India”. On the other, it paves the way for cheaper imports that will crush Indian producers. Who benefits? Not the farmer. Not the weaver. Only traders and importers who profit from arbitrage while the annadata drowns in debt.
A sector too big to fail
Cotton and textiles are not a niche. They are among the largest employers in India, sustaining 4.5 crore livelihoods. In 2024-25, India exported Rs 74,648 crore worth of cotton yarn and fabrics and garments* to the US. With tariffs cutting that nearly in half, an estimated one lakh workers could lose their jobs in the coming months.
This isn’t just about trade deficits or balance sheets. It is about millions of rural families whose daily bread depends on spinning mills, dyeing units, powerlooms and handloom cooperatives. When policy reduces them to collateral damage, the consequences ripple far beyond the fields.
The global context
The irony is sharp. The US – which pushes free trade when convenient – has weaponised tariffs against India’s labour-intensive sectors. But India’s response has been to import more, not negotiate harder. Countries like Bangladesh and Vietnam, backed by consistent government support, are ready to eat into India’s market share. Every bale of Australian cotton entering India duty-free is one less buyer for a struggling Indian farmer.
What needs to change – now
India’s cotton crisis is not inevitable. It is political. And it demands urgent course correction.
Three steps are critical: first, guarantee remunerative prices. The MSP must be immediately revised in line with the Swaminathan formula. Procurement has to be guaranteed – not theoretical. If farmers know they will at least get Rs 10,075 per quintal, they can survive the export crisis.
Second, diversify export markets. Overdependence on the US has left India exposed. The government must aggressively negotiate access to new markets – from ASEAN to Africa – and shield exporters from tariff shocks.
Third, relief packages for cotton states. Maharashtra, Gujarat and Telangana – India's cotton heartlands – need targeted relief. This includes direct income support, debt waivers where necessary and credit at concessional rates. The rural economy cannot be allowed to collapse under a burden not of its making.
Beyond cotton – a larger warning
The cotton story is not just about one crop. It is about India’s economic strategy. For a decade, policies have oscillated between nationalist slogans and neoliberal openings, often leaving the farmer at the losing end. Removing import duties while farmers bleed is not a strategy. It is abdication.
India cannot aspire to be a global textile hub while betraying its own producers. It cannot celebrate khadi and handlooms on podiums while suffocating the very weavers who keep those traditions alive. It cannot, in good conscience, ignore the plight of farmers who grow what the world wears.
The thread that must not break
Cotton is more than commerce. It is dignity, survival and heritage. It clothes the nation and carries its culture abroad. To allow it to be undermined by incoherent policies is to fail not just farmers but the very fabric of India’s economy.
If the government truly wishes to “pay a heavy price”, let it not be borne by the farmer. Let it bear the political cost of bold, farmer-centric reforms. Because every thread of cotton left unsold, every loom left silent, every farmer left unheard – is a tear in the nation’s conscience.
Renuka Chowdhury is a Rajya Sabha MP from the Indian National Congress and former Union cabinet minister. Her official X handle is @RenukaCCongress.
*Readymade garments of all textiles.
This article went live on August twenty-seventh, two thousand twenty five, at thirty-four minutes past five in the evening.The Wire is now on WhatsApp. Follow our channel for sharp analysis and opinions on the latest developments.
