The Indian cotton textile industry has been facing unforeseen crisis from the beginning of the year especially from 1st April 2022 due to abnormal increase in cotton price that was primarily caused by speculation of cotton trading under MCX and 11 percent import duty levied on cotton. The MCX cotton price has been costlier by 40 percent to 60 percent till 31st August 2022 when compared to the New York futures. The removal of 11percent import duty on cotton from 14th April 2022 to 31st October 2022, though gave a sigh of relief, it did not last long as the international and domestic cotton prices started coming down and creating a panic situation in the industry. When several textile mills were attempting to re-negotiate the contract or seek legal remedy for cancellation of contract, the speculation caused by MCX trading made the Indian cotton expensive that enabled the trade to protect their contract. However, the international cotton price continues to be lower by 20 percent to 25 percent that had caused production stoppage to the tune of 30 percent to 40 percent across the cotton textile value chain.

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