Sanjay Parate
According to government figures, 32 lakh farmers in India are engaged in cotton production ; the actual figure is likely much higher. The vast majority of these cotton growers are marginal and small farmers. India imposes an 11 percent duty on cotton imports. This import duty serves to curb the indiscriminate import of cheap cotton and protect the interests of domestic cotton farmers. However, the RSS-BJP-led central government has decided to suspend this import duty for a five-month period, from June to October of this year. This government decision is expected to lead to the import of 40 lakh bales of cotton (1 cotton bale = 170 kg).
The question arises : has a cotton shortage emerged in our country? The clear answer is no, as representatives of the cotton industry themselves have publicly acknowledged that there is adequate domestic availability of cotton. The cotton sowing season has already begun, farmers have invested in their cultivation, and the new cotton crop is set to hit the market between October and December. So, why is the Modi government opening the country's doors to cotton imports?
The answer to this question lies in the US-India trade agreement, the crux of which is that India is compelled to purchase goods worth $100 billion annually from the US — regardless of actual need — and that too, duty-free. In the previous season, cotton imports between August and December were exempted from duties, resulting in the import of 18 lakh cotton bales, whereas 8.8 lakh bales had been imported with duties during the same period the year before. A consequence of the US trade agreement is that the volume of imported bales is projected to reach 40 lakh bales during the five-month period from June to October, even though India's total annual cotton imports have historically ranged between 40-50 lakh bales. This simply means that cotton imports are now expected to increase two- to two-and-a-half-fold, at the expense of Indian farmers.
Cotton imports on such a massive scale — and exceeding actual requirements — are bound to have a negative impact on Indian farmers. The immediate effect of the decision to waive import duties for the next five months has been a 3% drop in cotton prices. The average Minimum Support Price (calculated as the mean of the rates for medium-staple and long-staple varieties) is approximately Rs. 8,500 per quintal ; however, in the open market, farmers typically receive only Rs. 6,800 per quintal. Following the announcement of duty-free imports, the price has fallen even further, dropping below Rs. 6,600 per quintal. This decline is expected to accelerate as the Indian market becomes flooded with American produce.
On one hand, the prices of agricultural inputs — such as seeds, fertilizers, pesticides, electricity, diesel, and water — are rising rapidly ; on the other, cotton prices are set to plummet, leaving farmers without remunerative support prices. Indian farmers are in no position to withstand this shock. Losses from cotton cultivation will mount, farmers will sink deeper into debt, and the tendency to commit suicide to preserve their dignity will intensify — particularly in regions like Vidarbha, where cotton is the primary crop.
In our country, the Cotton Corporation of India (CCI) purchases cotton from farmers at the support price announced by the central government. If prices fall due to imports, the CCI would be forced to sell cotton in the market at lower rates, resulting in financial losses. This would directly impact its capacity to procure cotton from farmers at the support price. Not only would this ruin the CCI, but it would also further deprive cotton-growing farmers — the majority of whom are small and marginal — of the benefits of the support price system. The weakening of the CCI would jeopardize the very system of support prices for cotton farmers. A collapse of the support price mechanism for cotton would directly mean losing self-reliance in cotton production and transforming India into a cotton-importing nation.
The Modi government is implementing a 'Cotton Productivity Mission' to boost cotton production. Finance Minister Nirmala Sitharaman announced this in the February 2025 budget. The mission be jointly implemented by the Ministry of Agriculture and Farmers Welfare and the Ministry of Textiles. An expenditure of over Rs. 5,659 crore has been announced for this mission over the next five years. Under this initiative, plans include developing climate-resilient and pest-resistant seeds, promoting modern technologies, digitizing *mandis* (agricultural markets), and connecting farmers directly to markets through e-platforms. However, this mission is likely to meet the same fate as other schemes designed for farmers, as it completely fails to address the need to ensure a remunerative support price for cotton farmers based on the 'C-2+50 percent' formula. The question arises : how can cotton production in the country be increased without providing farmers with a remunerative support price and while simultaneously allowing duty-free imports of cotton? It is evident that the entire mission is merely a ploy to hoodwink cotton farmers and the farmers' movement.
At whose expense are India's cotton farmers facing ruin? The beneficiaries will undoubtedly be the cotton traders who have seen an average profit growth rate of 22–23 percent over the last five years. In this period, the net profit margins of cotton traders and mills have ranged from 9 to 38 percent. Importing cotton at zero import duty will further boost their profits. The US, currently the second-largest exporter of cotton to India, is poised to take the top spot. This will allow big American farmers— there are no small or marginal farmers in the US — who receive massive government subsidies and never face losses from crop failure or price drops, to capture the Indian market ; meanwhile, they are scouring the globe to offload their produce. It is worth noting that while an American farmer receives an average annual direct subsidy exceeding Rs. 25 lakh and is insulated from losses due to crop failure or price volatility, an Indian farmer receives an average annual subsidy of only Rs. 6,000 and must bear the entire burden of crop failure or price fluctuations. Consequently, American cotton is consistently cheaper than Indian cotton in the global market. Thus, Indian cotton traders will opt to purchase cheaper American cotton rather than buying from Indian farmers, thereby maximizing their own profits. American farmers will prosper, and the profits of Indian corporate cotton traders will soar, all built upon the ruin of the Indian farmer.
This is precisely what the BJP-RSS Modi government desires. The security of Indian farmers and the needs of national agriculture do not figure among its priorities. That is why it is shamelessly capitulating to global and imperialist economic pressures. To counter these pro-imperialist policies of the Modi government and to safeguard the country's agricultural sector and sovereignty, all sections of the general public — including farmers and workers — must unite and wage a collective struggle.
The author is an independent writer on politics, social and agrarian issues. The views are personal.
The question arises : has a cotton shortage emerged in our country? The clear answer is no, as representatives of the cotton industry themselves have publicly acknowledged that there is adequate domestic availability of cotton. The cotton sowing season has already begun, farmers have invested in their cultivation, and the new cotton crop is set to hit the market between October and December. So, why is the Modi government opening the country's doors to cotton imports?
The answer to this question lies in the US-India trade agreement, the crux of which is that India is compelled to purchase goods worth $100 billion annually from the US — regardless of actual need — and that too, duty-free. In the previous season, cotton imports between August and December were exempted from duties, resulting in the import of 18 lakh cotton bales, whereas 8.8 lakh bales had been imported with duties during the same period the year before. A consequence of the US trade agreement is that the volume of imported bales is projected to reach 40 lakh bales during the five-month period from June to October, even though India's total annual cotton imports have historically ranged between 40-50 lakh bales. This simply means that cotton imports are now expected to increase two- to two-and-a-half-fold, at the expense of Indian farmers.
Cotton imports on such a massive scale — and exceeding actual requirements — are bound to have a negative impact on Indian farmers. The immediate effect of the decision to waive import duties for the next five months has been a 3% drop in cotton prices. The average Minimum Support Price (calculated as the mean of the rates for medium-staple and long-staple varieties) is approximately Rs. 8,500 per quintal ; however, in the open market, farmers typically receive only Rs. 6,800 per quintal. Following the announcement of duty-free imports, the price has fallen even further, dropping below Rs. 6,600 per quintal. This decline is expected to accelerate as the Indian market becomes flooded with American produce.
On one hand, the prices of agricultural inputs — such as seeds, fertilizers, pesticides, electricity, diesel, and water — are rising rapidly ; on the other, cotton prices are set to plummet, leaving farmers without remunerative support prices. Indian farmers are in no position to withstand this shock. Losses from cotton cultivation will mount, farmers will sink deeper into debt, and the tendency to commit suicide to preserve their dignity will intensify — particularly in regions like Vidarbha, where cotton is the primary crop.
In our country, the Cotton Corporation of India (CCI) purchases cotton from farmers at the support price announced by the central government. If prices fall due to imports, the CCI would be forced to sell cotton in the market at lower rates, resulting in financial losses. This would directly impact its capacity to procure cotton from farmers at the support price. Not only would this ruin the CCI, but it would also further deprive cotton-growing farmers — the majority of whom are small and marginal — of the benefits of the support price system. The weakening of the CCI would jeopardize the very system of support prices for cotton farmers. A collapse of the support price mechanism for cotton would directly mean losing self-reliance in cotton production and transforming India into a cotton-importing nation.
The Modi government is implementing a 'Cotton Productivity Mission' to boost cotton production. Finance Minister Nirmala Sitharaman announced this in the February 2025 budget. The mission be jointly implemented by the Ministry of Agriculture and Farmers Welfare and the Ministry of Textiles. An expenditure of over Rs. 5,659 crore has been announced for this mission over the next five years. Under this initiative, plans include developing climate-resilient and pest-resistant seeds, promoting modern technologies, digitizing *mandis* (agricultural markets), and connecting farmers directly to markets through e-platforms. However, this mission is likely to meet the same fate as other schemes designed for farmers, as it completely fails to address the need to ensure a remunerative support price for cotton farmers based on the 'C-2+50 percent' formula. The question arises : how can cotton production in the country be increased without providing farmers with a remunerative support price and while simultaneously allowing duty-free imports of cotton? It is evident that the entire mission is merely a ploy to hoodwink cotton farmers and the farmers' movement.
At whose expense are India's cotton farmers facing ruin? The beneficiaries will undoubtedly be the cotton traders who have seen an average profit growth rate of 22–23 percent over the last five years. In this period, the net profit margins of cotton traders and mills have ranged from 9 to 38 percent. Importing cotton at zero import duty will further boost their profits. The US, currently the second-largest exporter of cotton to India, is poised to take the top spot. This will allow big American farmers— there are no small or marginal farmers in the US — who receive massive government subsidies and never face losses from crop failure or price drops, to capture the Indian market ; meanwhile, they are scouring the globe to offload their produce. It is worth noting that while an American farmer receives an average annual direct subsidy exceeding Rs. 25 lakh and is insulated from losses due to crop failure or price volatility, an Indian farmer receives an average annual subsidy of only Rs. 6,000 and must bear the entire burden of crop failure or price fluctuations. Consequently, American cotton is consistently cheaper than Indian cotton in the global market. Thus, Indian cotton traders will opt to purchase cheaper American cotton rather than buying from Indian farmers, thereby maximizing their own profits. American farmers will prosper, and the profits of Indian corporate cotton traders will soar, all built upon the ruin of the Indian farmer.
This is precisely what the BJP-RSS Modi government desires. The security of Indian farmers and the needs of national agriculture do not figure among its priorities. That is why it is shamelessly capitulating to global and imperialist economic pressures. To counter these pro-imperialist policies of the Modi government and to safeguard the country's agricultural sector and sovereignty, all sections of the general public — including farmers and workers — must unite and wage a collective struggle.
The author is an independent writer on politics, social and agrarian issues. The views are personal.
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