"Temporary import duty exemptions protect industry at the cost of farmers." Critically examine with reference to India's cotton sector.

India waived its 11% import duty on cotton in 2025 [2][3] and again in May 2026. On 30 October 2026, the Finance Ministry extended the 2026 waiver to 31 December because a poor Southwest monsoon had kept cotton arrivals low [1]. The statement is only partly true. Industry clearly gains. Whether farmers lose depends on when the waiver applies and how well MSP support works.

How exemptions protect industry

• The textile industry is the largest consumer of cotton. Duty-free imports fill the shortfall caused by the poor monsoon and keep mills' input costs down [1].
• This protects a labour-intensive value chain and keeps textile exports competitive.
• A time-bound notification lets the government change course step by step. It does not need to amend the tariff schedule [1].

How farmers bear the cost

• Timing: The extension runs into the new marketing season, which began on 1 October. These are the peak months for arrivals, so cheap imports can push down the prices farmers get at harvest [1].
• Double hit: Rainfed growers first lose part of their crop to the monsoon. Then they face lower prices.
• Gaps in MSP cover: The Cotton Corporation of India (CCI) buys only cotton of Fair Average Quality (FAQ) [2]. Cotton damaged by bad weather may fail this test.
• Long-term harm: Waivers in two years in a row [2][3] weaken the price signal to farmers. Meanwhile India's lint yield is about 447 kg/ha, against 1,830 kg/ha in Brazil [4]. Waivers treat the symptom, not this cause.

Counter-view: safeguards exist

• Through its MSP operations, CCI buys all FAQ cotton, with no limit on quantity, when prices fall below MSP [2]. This protects most farmers. The cost falls on the government budget instead: it loses duty revenue and also pays for procurement.

Way forward

• Mission for Cotton Productivity (₹5,659.22 crore, 2026-27 to 2030-31): raise lint yield from about 440 to 755 kg/ha by 2031 [5].
• Standing Committee report (2024): develop drought-tolerant seeds and guarantee procurement at at least 1.5 times the cost of production [4].
• Better timing: let waivers end before the harvest arrivals peak.

Temporary exemptions do protect industry, but farmers pay the price only when the waiver is badly timed and MSP cover is thin. Closing the yield gap would make yearly waivers unnecessary. Strong MSP support and seed reform can then protect farmers' incomes. Together these would balance the interests of mills and farmers, in line with SDG 2 and a self-reliant cotton-to-textile value chain.