The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, has approved an increase of ₹501 per quintal in the Minimum Support Price (MSP) for cotton for the Kharif Season 2025-26.
The MSP for medium staple cotton has been fixed at ₹7,121 per quintal, while the MSP for long staple cotton has been set at ₹7,521 per quintal — representing a 7.6% and 7.1% increase respectively over the previous season.
The decision is aimed at ensuring remunerative prices to farmers to cover their cost of production and incentivise cotton cultivation, which has seen acreage decline over the past two years due to profitability concerns.
The total cost of production for cotton, including imputed value of family labour, is estimated at ₹4,948 per quintal for medium staple and ₹5,214 per quintal for long staple. The new MSPs provide a margin of approximately 44% and 44.2% over the respective production costs.
Cotton farming employs approximately 6 million farmers across Maharashtra, Gujarat, Telangana, Andhra Pradesh, Karnataka, Madhya Pradesh and Rajasthan.
The Cotton Corporation of India (CCI) has been directed to ensure active procurement operations in all major cotton-growing states to provide farmers a floor price guarantee whenever market rates fall below the MSP.
Industry stakeholders from the spinning and textile sectors have noted that the MSP hike could marginally increase their raw material costs, though they expect market dynamics to absorb the impact given strong end-demand.