USDA Outlook: India's Cotton Area to Grow 3%, Output Up 7% in 2026/27, Supply to Ease

The U.S. Department of Agriculture (USDA) Foreign Agricultural Service forecasts that in the 2026/27 season (October–September), India's cotton planted area will increase by 3% year-on-year to 11.5 million hectares, supported by higher yields and normal monsoon conditions. Production is expected to rise by 7% to 25.2 million bales (480 lb/bale).

According to the report, output growth is mainly attributed to yield recovery to 477 kg/hectare and a low base effect from unseasonal rainfall in the previous season. Despite global trade uncertainties, domestic cotton consumption is projected to rise due to strong textile exports. Following a recently reached trade agreement between India and the United States, U.S. import tariffs on Indian goods have been sharply reduced from 50% to 18%, significantly boosting the competitiveness of Indian textile products in the U.S. market, with some orders already returning.

On the trade front, thanks to improved domestic supply, India's cotton imports in the new season are expected to decline to 3 million bales. Meanwhile, direct cotton exports are forecast to fall to 1.2 million bales, pressured by tighter exportable surplus and the industry's strategic shift toward higher value-added textile products.

On the supply side, although high crude oil prices have pushed up input costs such as fertilizers, high beginning stocks combined with increased total supply are expected to lift ending stocks to 12.3 million bales, with a stocks-to-use ratio of around 46%. Meanwhile, rising crude oil prices have increased the cost of man-made fibers, making cotton/polyester blended fabrics more competitive on a price-performance basis, providing additional support for cotton consumption. Overall, the 2026/27 season for India's cotton market is characterized by "ample supply, strong domestic demand, and contracting exports."