Lawmakers Push for Elimination of Indian Duties on US Cotton Amid Stalled Trade Deal

Why It Matters

Eliminating the duty would boost U.S. cotton farmers’ revenues and support India’s textile sector, but lingering trade tensions risk delaying the economic gains for both economies.

Key Takeaways

• Congress urges USTR to drop 11% India cotton tariff
• Interim Agreement offers chance to secure permanent duty elimination
• U.S. cotton exports to India grew $182M in 2024‑25
• Indian farmer protests fear US goods displacing local producers
• Trade talks stalled after new U.S. 10% tariffs, IEEPA ruling

Pulse Analysis

The United States remains the world’s leading cotton exporter, shipping roughly 85% of its crop abroad. India, despite being a major textile manufacturer, imposes an 11% import duty that makes American cotton less competitive against alternative sources. This tariff not only squeezes U.S. farm incomes—already strained by weather and price volatility—but also limits India’s access to a reliable, high‑quality fiber needed for its expanding apparel industry. Understanding the economics of this trade barrier is essential for stakeholders on both sides of the Pacific.

Political momentum for tariff removal surged after the February Interim Agreement, which granted duty‑free status to most U.S. goods and secured a $500 billion procurement pledge from India. Congressional leaders framed the agreement as a “monumental opportunity” to lock in permanent cotton market access, arguing that a stable supply chain would benefit Indian manufacturers while delivering a critical revenue boost to American growers. However, domestic unrest in India—where farmer unions fear that cheaper U.S. cotton could displace local production—has sparked nationwide strikes, adding a layer of social risk to the commercial calculus.

Negotiations now face a double‑edged challenge: the U.S. has imposed a new 10% tariff on Indian imports under Section 122, and the Supreme Court’s recent decision overturning IEEPA‑based tariffs casts doubt on the legal framework supporting the Interim Agreement. If policymakers can reconcile these disputes, the removal of the 11% duty could unlock a market that grew $182 million between 2024 and 2025, reinforcing supply chains and stabilizing farm incomes. Conversely, prolonged stalemate may push Indian textile firms toward alternative suppliers, eroding the potential gains for both economies.