7% Hike For Cotton MSP May Push Up Garment Prices, Impact Textile Export Competitiveness

(MENAFN- KNN India) New Delhi, Jun 6 (KNN) The Government has announced a 7 percent increase in the Minimum Support Price (MSP) for cotton for the upcoming season (October 2025 to September 2026).

This raised the MSP from Rs 7,521 to Rs 8,110 per quintal for long-staple cotton and from Rs 7,121 to Rs 7,710 per quintal for medium-staple cotton.

While this development promises direct benefits for cotton farmers through improved income support, industry stakeholders have expressed concerns about potential downstream effects on India's textile export sector.

The textile industry, encompassing yarn, fabric, and garment manufacturing, represents a significant employment generator, with garment production creating the highest number of jobs among the three segments.

Cotton-based garments constitute over 50 percent of India's total garment exports, making the cotton price adjustment particularly relevant for the sector's global competitiveness.

The Confederation of Indian Textile Industry (CITI) has highlighted that current global cotton prices remain below domestic rates, creating a cost disadvantage for Indian manufacturers.

Former CITI President Sanjay Jain noted that if this pricing differential persists beyond October, Indian-made garments may face reduced competitiveness against products from competing nations, as higher raw material costs translate into increased production expenses.

Industry representatives from Gujarat and Punjab estimate that the MSP increase could result in cotton garment price increases of up to five percent, as higher cotton costs cascade through the supply chain, affecting yarn and fabric pricing.

This cost escalation occurs in a market where India competes directly with manufacturing hubs including China, Bangladesh, Cambodia, and Vietnam.

Garment manufacturers have indicated that while price adjustments may become necessary, the impact could be moderated if producers accept reduced profit margins.

The industry faces the challenge of balancing farmer welfare through improved MSP rates with maintaining export competitiveness in an increasingly price-sensitive global market.

(KNN Bureau)

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