Union Government’s Removal of Cotton Import Duty Sparks Farmer Outrage

New Delhi:  The Union Government’s decision to scrap the 11% import duty on raw cotton has ignited outrage among the farmers. The move, officially announced by the Central Board of Indirect Taxes and Customs (CBIC), is to remain in effect from August 19 to September 30, 2025.India’s largest farmers’ union the All India Kisan Sabha (AIKS), have condemned this decision as being fundamentally anti-farmer and disastrous for millions of small and marginal cotton growers across the country.

Import duties on agricultural commodities like cotton serve as a protective mechanism that shields domestic producers from being undercut by cheaper foreign imports. By eliminating the 11% duty, the government has effectively made it easier and more profitable for traders and textile manufacturers to import raw cotton from countries like the United States, where production is heavily subsidized. As a result, the influx of cheaper imported cotton is expected to bring down the overall market price of cotton within India. This drop will directly impact domestic farmers, who will be forced to sell their produce at reduced prices that do not reflect the high costs they have already incurred during cultivation.

The timing of the decision could not have been more damaging. In India, cotton is sown between June and July. By mid-August, most cotton farmers have already made significant investments in seeds, fertilisers, pesticides, and irrigation. They do this with the expectation of recovering their costs and making a modest profit during the harvest season, which begins shortly after. Now, with the prospect of market prices falling due to the cheaper availability of imported cotton, farmers find themselves staring at potential financial ruin. Their projected income has been destabilised at a point when they have no room to adjust, renegotiate, or even switch to other crops.

The move also appears contradictory to the rhetoric frequently used by the government itself. Prime Minister Narendra Modi, in his recent Independence Day speech, claimed that he would stand “like a wall” against any policies that could harm farmers, fisher-folk, and cattle keepers. 

He went on saying that the interests of India’s primary producers would never be compromised. But AIKS and other farmer unions pointed out that this decision demonstrates the opposite — that the government is willing to jeopardise farmers' livelihoods to manage international trade relations, particularly with the United States.

Trade tensions between India and the U.S. have escalated in recent years, with the U.S. imposing more than 50% tariffs on Indian textile exports. Instead of taking a firm stand to protect Indian producers in this global dispute, the government has chosen to appease the U.S. by opening Indian markets to subsidised American cotton. AIKS say that this is not only a betrayal of Indian cotton farmers but also a dangerous precedent that could extend to other agricultural commodities if left unchecked.

A long-standing inequality in global agricultural economics is the root cause behind this policy decision. Cotton farmers in the United States receive substantial government subsidies, amounting to nearly 12% of the total value of their production. This state-backed support allows them to produce cotton at much lower effective costs. In contrast, Indian farmers receive far less assistance from their government — only around 2.37% of their production value. AIKS contends that removing import duties in this context amounts to surrendering Indian agriculture to an inherently unequal and unjust global trade system.

The situation is further exacerbated by the government’s failure to deliver on its promises regarding Minimum Support Price (MSP). During his tenure, Prime Minister Modi has repeatedly promised to implement the Swaminathan Commission's recommendation of MSP at C2+50 — that is, the cost of production plus 50%. However, this commitment remains unfulfilled. For the 2025 Kharif season, the government has fixed the MSP for cotton at Rs. 7,710 per quintal. According to the C2+50 formula, the fair MSP should be Rs. 10,075 per quintal, meaning farmers are already earning Rs. 2,365 less per quintal than what was promised. Now, with market prices expected to dip further due to the influx of cheaper cotton imports, farmers are staring at an even greater shortfall. AIKS has described this as nothing less than institutionalised looting of farmers by the state.

The organisation also warns that this is not an isolated incident but part of a broader pattern of neoliberal agricultural policy. For years, Indian farmers have faced pressures from both the input side (rising costs of seeds, fertilisers, and fuel) and the output side (declining market prices and inadequate state support). In this context, any policy that allows for easier imports without sufficient protections for domestic producers only accelerates the crisis in rural India.

Furthermore, there is growing concern that the decision to scrap cotton import duties may pave the way for similar actions concerning other crops. The U.S. has consistently lobbied for India to reduce trade barriers on various agricultural products. If the government continues to bow to international pressure, Indian farmers across multiple sectors could find themselves in similar situations — unprotected, unsupported, and undercut by cheaper, subsidised imports.