Domestic cotton production to dip by 1.7% YoY in CYi2026 (October 2025 to September 2026) amid uneven rainfall and acreage shifts by farmers. Amid low cotton output, dependance on imports rose sharply in 5M FY2026 (up 85% YoY) with the United States being the key supplier with 22% share. Import duty exemption on cotton imports from August 19, 2025, till December 31, 2025 and the relatively subdued demand for cotton yarn has kept cotton prices soft despite a contraction in output over the last two cotton seasons.

Exhibit: Trend in area sown for cotton across years (YoY %)

Source: Unified Portal of Agricultural Services (UPAg), GoI; ICRA Research