US curbs on Chinese cotton fuel domestic price rise, industry seeks regulation

Indian apparel exporters have petitioned the Commerce and Industry Ministry and the Textile Ministry to regulate exports of cotton yarn due to a sharp price surge, triggered by US restrictions on Chinese cotton from the Uyghur region. This region is alleged to use forced labor, as highlighted by Washington. The price jump comes as China remains the world's largest cotton producer, contributing 29% of global production, while India is the second-largest producer.

The Apparel Export Promotion Council (AEPC) reported a 60% rise in cotton yarn prices, from Rs 250 per kg in early 2026 to Rs 400 per kg currently, causing pressure on the apparel manufacturing value chain. The council requested measures to regulate cotton yarn exports, particularly 20s count and above, to stabilize prices and ensure availability at competitive rates.

They also noted limited ginners' stock and reduced cotton arrivals, forcing mills to rely on Cotton Corporation of India (CCI) auctions. Much of the cotton has already been acquired by traders, resulting in hoarding and speculation, according to the AEPC. Forced labor curbs have pushed manufacturers, including Bangladesh and Vietnam, to seek alternative cotton sources from India, exacerbating the price surge.

Indian cotton productivity is among the lowest globally, further compounding the issue. While India produces 23.8 million bales annually on 11.2 million hectares, top producers like China, Brazil, and the US have less than 3.2 million hectares under harvest. US supply chain measures aim to pressure the Chinese supply chain, targeting products like cotton, textiles, and electronics suspected of forced labor risks in China's Xinjiang region.