The predominantly cotton based textile industry in India has been performing extremely well immediately after the second wave of COVID pandemic owing to pent up demands that emerged in the post-COVID scenario. The US sanction on Xinjiang province cotton, attractive cotton futures trading and pent-up demand forced the cotton price to reach a record high level in a short span of time. Considerable drop in cotton production from the level of 360 to 330 lakh bales, a record consumption to the tune of 360 lakh bales from the normal level of 290 to 320 lakh bales per year and 11 percent import duty levied on cotton till 13th April 2022 fuelled the situation. The steep increase in cotton price during the peak season has highly benefited the cotton farmers, ginners and traders and major players in these segments started hoarding the seed cotton and lint cotton, leading to speculation of prices. It is estimated that 40 to 50 lakh bales are yet to arrive the market. The traders in India also capitalized MCX and NCDEX platforms to make Indian cotton expensive by 5 percent to 10 percent taking advantage of 11 percent import duty by adopting import parity pricing policy and destabilising the market.