As tariffs bite, farms, mills diverge on import duty cut

In India’s cotton belt of Vidarbha, the monsoon months of July and August are busy. Farmers across the districts of western Vidarbha in Maharashtra plant the cotton crop, readying them for harvest in the winter months of November-December. Despite persistent indebtedness and news of farmers ending their lives, this area has remained India’s unofficial cotton capital, supplying roughly 25% of India’s production of 30 million -32.5 million bales. Across the state, roughly 4.08 million hectares are under cotton production.

- Pradip Maitra and Divya Chandrababu

This monsoon, however, has added an additional layer of anxiety after the government decided to scrap the 11% duty on raw cotton imports until September 30, which many say was prompted by the US announcing a punitive 50% tariffs on India that came into effect on Wednesday.

Prices have slumped from ₹7,500 per quintal to ₹7,000 since the announcement on August 19, according to Suresh Khandankar, secretary of the Agricultural Produce Marketing Committee of Pandharkawda in Yavatmal district and farmers fear they might plunge further. Farmer groups and activists fear that the move - which removes protection for Indian cotton — will flood the market with cheap imported cotton, depress domestic prices, and push cultivators further into distress.

Price crash fears loom

The anxiety is palpable in the villages. Pentamama Parlewar, 67, a cotton farmer from Kopa Mandvi village in Yavatmal, said his condition was already precarious after being denied a loan by his local bank. “I own five acres of land, all under cotton cultivation. During the season, we need funds midway to pay for labour. Since the bank has refused me a loan, I am now forced to turn to moneylenders, who charge as much as 20% interest,” he explained. He fears that the removal of import duty will further depress prices, making it even harder to repay his loans.

For farmers like Sunil Raut, 41, of Kelapur, who has cultivated cotton on all of his 20 acres, the uncertainty is unbearable. “I have already taken a ₹2 lakh crop loan. If prices crash, I will not be able to repay and will be marked a defaulter,” he said.

In this belt, which has long been in the news for suicides and controversy around transgenic crops, many farmers know their crisis is the outcome of a complex mix of environmental, economic, and systemic factors. But they fear that a price crash for even one season could push many into destitution.