The findings suggest that while the duty waiver has removed a significant tariff barrier, imported cotton has not become materially cheaper than domestic supplies. Mills evaluating imports must still factor in freight, insurance, port handling, inland logistics, financing costs, and exchange-rate movements, which can quickly eliminate the narrow price differential.
A separate CAI comparison showed Indian cotton averaging an *.** cents per pound premium, over the ICE December **** cotton futures contract, during the same week. However, this reflects the basis between India**;s physical spot market and a forward futures contract rather than export competitiveness, making the Cotlook A comparison a more appropriate indicator for assessing import economics.
The temporary duty exemption, effective from June * to October **, ****, was introduced to improve raw material availability for the domestic textile industry. However, current price relationships indicate that import decisions are likely to remain driven by fibre quality, shipment timing and mill-specific requirements rather than by a substantial cost advantage over Indian cotton.
