Cotlook Index: 05-10-2026
89.35 (+1.00)
India's economy to grow 7.1% in FY27: World Bank
Tuesday, 6th Oct 2026, (Source: www.fibre2fashion.com)
Insights: India's economy is projected to grow 7.1 per cent in FY27, supported by domestic demand and exports, the World Bank said.Medium-term prospects remained strong despite risks from oil prices, El Niño and market corrections. Private AI investment rose to $4.1 billion in 2025, while the bank urged stronger infrastructure, wider access and workforce development to ensure broadly shared AI benefits.
India’s economy is projected to grow 7.1 per cent in fiscal 2027 (FY27), supported by robust domestic demand and strong exports despite global headwinds, according to the World Bank's latest India Development Update.The update said India remains one of the fastest-growing major economies in the world and a key contributor to global growth. Medium-term prospects are strong, but external risks are elevated, including downside risks linked to global oil prices, El Nino and stock market corrections that would result in capital flow volatility.The update’s special focus, India and Artificial Intelligence: Seizing the Development Opportunity, said the country is well positioned to harness artificial intelligence (AI) because of its large technical workforce, globally integrated information technology sector and digital public infrastructure.Private AI investment increased three-fold from $1.2 billion in 2024 to $4.1 billion in 2025, while Global Capability Centers employed 1.9 million professionals in 2024 and grew to 2.36 million professionals in 2025.The report acknowledged that the long-term economic and labour market impacts of AI remain uncertain. It called for cross-cutting policy actions to deepen AI-enabling infrastructure and improve the business environment, while broadening AI access and enhancing labour capacity so that AI benefits are broadly shared.The India Development Update is a companion to the World Bank Group’s South Asia Economic Update, which examines economic developments and prospects in the region. The latest South Asia Economic Update projects South Asia to grow 6.9 per cent in 2026, retaining its status as the strongest-growing region, the World Bank said in a press release.For most of South Asia, the report said the greatest gains lie in adopting AI and adapting it to local conditions, including through small AI applications suited to low-resource settings. It said progress would also depend on measures to reduce barriers to AI adoption by small firms, foster local AI innovation and establish a clear regulatory framework that reduces uncertainty, and safeguards data security and privacy.
Indian cabinet approves $1.04 bn SME Growth Fund
Tuesday, 7th Oct 2026, (Source: www.fibre2fashion.com)
India’s Cabinet, chaired by Prime Minister Narendra Modi, has approved a Government of India commitment of ₹10,000 crore ($1.04 billion) to establish the SME Growth Fund (SGF), aimed at providing direct equity investments and growth-oriented capital to small and medium enterprises (SMEs) across manufacturing, services, technology, innovation-driven sectors and strategic value chains.
Insights: India’s Cabinet has approved a ₹10,000 crore ($1.04 billion) government commitment to set up the SME Growth Fund for direct equity investments in small and medium enterprises.
The fund targets a gap in long-term growth capital, with majority allocation for manufacturing-focused SMEs. It will also consider SMEs in industrial clusters in Tier-II and Tier-III cities.
The approval follows Paragraph 28 of the Union Budget 2026-27 and was part of a wider set of Budget announcements focused on equity, liquidity and professional support for the micro, small and medium enterprise ecosystem, the government said. Existing equity support funds mainly focus on early-stage enterprises and cover mostly micro enterprises, leaving a structural gap in growth equity capital for small and medium enterprises. The SGF is designed to provide patient growth equity to high-potential SMEs with demonstrated business viability and scalability.The government described SMEs as central to employment generation, exports, manufacturing output and innovation. Although various initiatives have improved access to credit for SMEs, it said a gap remains in long-term risk capital for enterprises seeking to scale, innovate, expand internationally, adopt advanced technologies, undertake acquisitions and transform into industry leaders.Most allocation from the SGF will be directed towards small and medium manufacturing-focused enterprises, and the fund will also consider SMEs operating in industrial clusters in Tier-II and Tier-III cities. The government expects long-term capital from the initiative to help Indian SMEs scale operations, invest in technology and manufacturing capacity, expand into international markets, integrate into global value chains and undertake strategic investments.The government expects the fund to accelerate the emergence of a pipeline of Indian companies with the scale, innovation capability and competitiveness needed to become champions in their respective sectors. It described the initiative as part of its Viksit Bharat 2047 vision, aimed at strengthening India’s entrepreneurship ecosystem and deepening the domestic capital market for growth-stage enterprises.Under the initiative, the Government of India will make the aggregate commitment to an Alternative Investment Fund (AIF) established under the SGF framework. By enabling manufacturing enterprises to expand capacity, adopt advanced technologies and achieve greater scale, the SGF is expected to improve scale and productivity and strengthen export competitiveness.The commitment complements government efforts to strengthen the SME sector through reforms, digitalisation initiatives, credit support mechanisms, ease-of-doing-business measures, public procurement reforms, startup promotion initiatives and production-linked incentive programmes. Investments across industrial clusters, including in Tier-II and Tier-III cities, are expected to support balanced regional industrial development, reinforce local supply chains and generate high-quality employment opportunities.The government said the fund would help create champions, drive innovation-led industrialisation, and generate quality employment opportunities across the country, serving as a key pillar in advancing Viksit Bharat 2047.
India initiates anti-dumping probe on imports of textile chemicals
Tuesday, 7th Oct 2026, (Source: www.fibre2fashion.com)
Insights: India's DGTR has opened anti-dumping probes into caprolactam from China, Russia, Thailand and the US, and persulphates from China.Caprolactam feeds Nylon-6 yarn and tyre cord fabric, while persulphates are oxidising agents for textile and chemical processing. DGTR cited significant dumping margins, rising imports and price pressure; any duties could affect textile users but are not yet imposed.
India has initiated separate anti-dumping investigations into imports of caprolactam and persulphates, two chemical inputs with direct relevance to textile manufacturing. Caprolactam is a key raw material for Nylon-6 used in nylon filament yarn and tyre cord fabric, while persulphates are used as initiators and oxidising agents in textile and chemical processing. The investigations could therefore have implications for domestic chemical producers as well as downstream textile users sourcing these materials.The Directorate General of Trade Remedies (DGTR) has initiated an anti-dumping investigation into imports of caprolactam originating in or exported from China, Russia, Thailand and the US following an application filed by Gujarat State Fertilizers & Chemicals Limited. The applicant alleged that dumped imports were causing material injury to the domestic industry and sought anti-dumping duties on such imports.Caprolactam (tariff item 2933 71 00), also known as 6-Hexanelactam, is primarily used to manufacture Nylon-6 chips, which are subsequently processed into yarn and fabric. It is also used in nylon tyre cord fabric and nylon filament yarn, making the investigation directly relevant to parts of the man-made fibre and technical textile value chain. The investigation was initiated for a period from April 1, 2025, to March 31, 2026, while the injury investigation covers 2022-23, 2023-24, 2024-25 and the investigation period.The Authority said prima facie evidence showed that the dumping margin for caprolactam from each of the subject countries was above the de minimis level and significant. It also noted that imports had increased substantially in absolute terms and relative to Indian production and consumption, while their landed prices were below the applicant’s selling prices.
In a separate notification dated September 30, 2026, DGTR initiated an anti-dumping investigation into imports of persulphates originating in or exported from China. The application was filed by Calibre Chemicals Private Limited and UI-VR Private Limited, which alleged that dumped imports were causing material injury to the domestic industry.The product under consideration covers ammonium persulphate, potassium persulphate and sodium persulphate. DGTR described the three as closely related alkali metal salts that share common end-uses as initiators and oxidising agents in the textile and chemical industries.The persulphates investigation covers the period from April 1, 2025, to March 31, 2026, with the injury period spanning 2022-23, 2023-24, 2024-25 and the investigation period. The applicants were found to account for a major proportion of Indian production, while Yoyo Chemicals and Aminisha Organics LLP supported the application.DGTR said prima facie evidence indicated that the dumping margin on Chinese persulphates was significant and above the de minimis level. It also noted that import volumes had increased in both absolute and relative terms, accompanied by a steep decline in import prices, price undercutting and price suppression in the domestic market.
For the textile sector, the two investigations are significant because they cover inputs used at different stages of the man-made fibre and textile-processing chain. Caprolactam is linked to Nylon-6 yarn and technical textile production, while persulphates have applications as oxidising agents in textile processing. Any eventual anti-dumping duties could strengthen protection for domestic chemical manufacturers, while also affecting sourcing economics for textile and chemical users dependent on imported material. The DGTR notifications currently concern the initiation of investigations and do not themselves impose anti-dumping duties.
ICE cotton extends recovery on lower-price buying, short covering
Tuesday, 7th Oct 2026, (Source: www.fibre2fashion.com)
Insights: December 2026 ICE cotton rose 2.51 per cent to 80.86 cents per pound, taking its two-session recovery to 310 points.Lower-price buying, fresh US cotton enquiries, mill fixations and short covering supported the rebound despite dollar and yield headwinds.US harvest was 23 per cent complete, keeping supply pressure elevated; the 81–83 cents zone is key to confirming any bottom near 77 cents.
ICE cotton futures extended their recovery on Monday as lower-price buying, mill fixations and short covering outweighed pressure from a firmer US dollar, elevated Treasury yields, weaker crude oil and advancing harvest activity. Fresh enquiries for US cotton at reduced price levels also supported sentiment after the recent sharp sell-off. However, the broader trend remained cautious as the market was still recovering from heavy losses over the previous five weeks and supply pressure from the US harvest continued to build.December 2026 cotton gained 198 points, or 2.51 per cent, to settle at 80.86 cents per pound, close to the session high of 81.00 cents. The contract touched a low of 78.77 cents. After Friday’s 112-point rise, December has recovered 310 points, or 3.10 cents, over two sessions, indicating renewed buying interest following the recent sharp sell-off.The recovery was supported by fresh enquiries for US cotton, some business at lower price levels and continued mill on-call fixations. The 77–79 cents range appeared to attract commercial buying, while short covering also contributed to the rebound. However, the rally occurred on moderate volume, with 63,113 contracts traded compared with Friday’s 58,218 contracts and below last week’s average daily volume of 79,708 contracts.Open interest stood at 383,640 contracts at the start of Monday’s session after rising by 622 contracts on Friday. It remained below the record 389,494 contracts seen on September 29 following heavy liquidation. A sustained rise in both prices and open interest would provide stronger evidence of fresh long participation rather than merely short covering.US crop progress remained a source of supply pressure. Cotton harvesting was 23 per cent complete as of October 4, ahead of the five-year average of 21 per cent, while 74 per cent of bolls were open compared with an average of about 69 per cent. Crop condition slipped marginally, with around 33 per cent rated good to excellent. Rain and cooler weather in parts of Texas and the US South raised concerns more about lint quality than overall crop size.Macro signals remained mixed. A firmer US dollar, elevated Treasury yields and weaker crude oil prices created a less supportive backdrop for commodities. The dollar index gained around 0.2 per cent, while the US 10-year Treasury yield was near 5.31 per cent. Crude oil fell $1.68 to $89.43 per barrel. Despite these headwinds, stronger equity markets and improved risk appetite helped cotton remain among the stronger-performing commodities.Export demand remained comparatively supportive at lower price levels, with recent Upland sales of around 202,567 bales. However, actual shipments continued to lag the pace required to meet seasonal targets. China’s Golden Week holiday also limited fresh market signals, with Zhengzhou cotton futures due to resume trading on October 8.Technically, December cotton has recovered around 379 points from its recent low of 77.05 cents. Immediate resistance is seen at 81.00–81.20 cents, followed by 82.00–82.20 cents and 83.00 cents. A sustained close above 81 cents, accompanied by rising open interest, could strengthen the recovery. Support is seen at 80 cents, followed by 78.80–79.00 cents and the recent low of 77.05 cents.Despite the sharp two-session rebound, the broader structure remained cautious. December cotton had posted its fourth lower weekly close in five weeks and remained around 12.50 cents below levels seen five weeks earlier. The current move therefore still appeared to be a recovery rally rather than a confirmed trend reversal, with the 81–83 cents zone likely to determine whether the recent 77-cent area has formed a meaningful bottom.his morning (Indian Standard Time), December 2026 cotton was trading at 80.80 cents per pound (down 0.06 cents). Cash cotton was traded at 78.61 cents (up 1.98 cents), while the October 2026 contract traded at 77.13 cents (up 1.98 cents). The March 2027 contract was at 83.68 cents (down 0.03 cents), May 2027 at 85.22 cents (down 0.05 cents), and July 2027 at 85.63 cents (down 0.08 cents). A few contracts remained at their previous closing levels, with no trading recorded so far today.
First Meeting of the Development Council for Textile Industry (DCTI) Held; Council Deliberates on Roadmap for a Competitive and Integrated Textile Value Chain
Tuesday, 6th Oct 2026, (Source: www.pib.gov.in)
The first meeting of the Development Council for Textile Industry (DCTI) was held on 6th October, 2026 at Vigyan Bhawan, New Delhi, under the chairpersonship of Secretary, Ministry of Textiles, Smt. Neelam Shami Rao. The Council, constituted as the apex consultative platform of Government, industry and stakeholders, convened to deliberate upon its mandate of advising the Government on the orderly growth and development of the textile industry. The meeting was attended by Senior Officers of the Ministry, representatives of Industry Associations, Export Promotion Councils, Research Associations, State Governments and Sector Experts.Addressing the Council, the Chair underscored that the textiles and apparel sector continues to be among the largest employment generators and export earners for the country and called for a coordinated, whole-of-value-chain approach towards production, innovation and global market access. The deliberations at the meeting focused on the following key areas:
· Production and Productivity: Capacity addition, modernisation, scale and cost competitiveness across the fibre, yarn, fabric, processing and apparel segments, with emphasis on addressing gaps across the value chain.
Research and Development: Strengthening industry–research linkages, fostering innovation in new-age fibres and technical textiles, and facilitating faster commercialisation of R&D through Research Associations and institutions.Exports and Market Access: Diversification of products and markets, leveraging trade agreements, and addressing quality, compliance and logistics-related constraints faced by exporters.Raw Material and Input Availability: Ensuring stable and competitive availability of cotton, man-made fibres, yarn, dyes and chemicals, supported by effective market intelligence.
· Investment, Skilling and Sustainability: Promoting ease of doing business, strengthening support for MSMEs, workforce skilling, and adoption of sustainable and circular practices.
Members shared sector-specific suggestions on each of the above themes and welcomed the institutionalised industry - Government interface provided by the Council.
The Council agreed to constitute Working Groups/Sub Committees on priority themes and to meet at regular intervals to review progress. The Council’s recommendations will inform the Ministry’s policy and programme interventions and are aimed at:
· higher domestic production, improved productivity and a more integrated, scale-oriented value chain;
· faster translation of research into industry practice, including in the areas of technical textiles and new-age fibres;
· sustained growth in textile and apparel exports through wider market and product diversification; and
· greater investment, employment generation and a stronger and more sustainable domestic ecosystem.
The Chair thanked the members for their valuable inputs and reiterated the Government’s commitment towards a collaborative and industry-facing approach for the sustained growth of the sector.
