Despite Prime Minister Narendra Modi’s public appeal for austerity and reduced foreign spending, the textile ministry is reportedly set to remove the 11% protective tariff on cotton imports, the timing coinciding with US Secretary of State Marco Rubio’s visit to India. The move is all the more concerning given the rupee stands at Rs 95.60 to the US dollar. Diverting more rupees into cotton imports risks eroding the national currency further. Last year, India suspended the 11% import tariff until December 2025 under US pressure. Now, with Rubio’s visit, it has been completely removed. This development is significant as India imports about 15% of its raw cotton and 20% of its yarn to keep its vast cotton processing industry running. With the tariff gone, heavily subsidised American cotton, among others, can easily flood the market and undercut local prices. US cotton farmers are among the most subsidised in the world, with the government investing billions over the years to keep the sector alive. Since the earlier duty removal in 2025, foreign cotton landed in India at roughly Rs 5,000-5,100 a bale, compared to the local cotton selling at Rs 6,100. The projected minimum support price (MSP) for 2025 was Rs 7,710 (medium staple) and Rs 8,110 (long staple). The domestic prices crashed as a result. Several farmers groups protested against the duty removal, citing loss of income and the outflow of Indian money to foreign farmers as major concerns. Meanwhile, the textile industry has been repeatedly calling for the removal of the import tariff, seeking access to cheaper foreign subsidised raw material and hoping for domestic prices to fall in step. What makes the removal harder to justify is that the tariff did not disrupt business. With the rupee falling, foreign buyers were already getting more value for the US dollar and despite the tariff being in place, imports were reported to have increased by 77% in 2024-25. Thus, the arrangement appeared to work well for farmers, the industry and the broader economy, with tariff revenues adding to national forex and domestic farm gate incomes remaining stable. So why did they change it? For context, India is the world’s second-largest producer of cotton, accounting for nearly 24% of the global production. About six million farmers grow cotton and about 40-50 million workers are employed across one of the world’s largest cotton processing and clothing industries. The textile and apparel sector contributes 2.3% to the gross domestic product (GDP), 13% to industrial production and 12% to exports. A misstep in policy can have potentially devastating economic consequences. However, it seems the textile ministry has chosen a path that may allow for expansion of cotton processing capacity while portending the death of domestic cotton production. Perhaps, this decision reflects geopolitical pressure or is tied to India’s “500 billion investment in America” commitment. Nevertheless, once at play, Indian cotton production will decline and farmers, already burdened by debt and often pushed to extreme mental distress and deaths by suicide, will be forced to shift to other crops. They cannot realistically compete with the 2,000-acre of heavily subsidised American cotton farms. The Indian economy will lose a substantial share of the agri-cash crop economy and foreign farmers will conversely gain at Indian farmers’ loss. Over time, our entire clothing industry may become increasingly reliant on foreign imports, with sustained forex outflows as a result. Even now, India bleeds precious foreign exchange in royalties and trait fees to foreign seed companies on all genetically modified cotton seeds, with those same companies frequently providing pesticides and fertilisers. They presently profit from almost all levels of the cotton growing cycle. If the textile ministry has a change of heart and wishes to aid the Prime Minister, they must suspend the tariff removal and adopt a more constructive approach of promoting cheaper indigenous alternatives, such as banana fibre, bamboo and hemp, to address the gap. By allowing the cultivation of natural fibre clusters and linking the farmers to these sectors, the government can reduce dependence on cotton imports without undermining domestic markets. Even if some level of cotton imports becomes unavoidable in future, policymakers must start diversifying industrial demand towards other natural fibres, thus, reducing India’s vulnerability to geopolitical pressures impacting decision-making. Indra Shekhar Singh is an independent agri-policy analyst and writer.