India Launches App for Cotton Farmers Amid Price Concerns: A Digital Shift with Challenges

On August 28, 2025, the Cotton Corporation of India (CCI) launched the Kapas Kisan app to streamline cotton procurement at the Minimum Support Price (MSP) for the 2024-25 season, addressing concerns over falling cotton prices due to a temporary import duty waiver. The app, set to activate on September 1, 2025, allows farmers to register, book slots, and sell their produce at MSP (₹8,110 per quintal), with procurement starting October 15, 2025, aligning with the Kharif harvest. The move comes amid a steep decline in cotton prices, triggered by the government’s decision to remove the 11% import duty on cotton from August 19 to September 30, 2025, under US trade pressure, making imported cotton cheaper (₹50,000-51,000 per candy vs. CCI’s ₹56,000-57,000). This has raised fears among farmers, particularly in Vidarbha, Maharashtra, about low market rates and reliance on CCI procurement. This article explores the app’s launch, the historical context of India’s cotton market, future projections, and impacts, with a focus on Tamil Nadu’s role.

Why This App Matters

The Kapas Kisan app aims to modernize cotton procurement, offering farmers transparency and efficiency through digital slot booking and real-time MSP updates. However, concerns about digital literacy, poor rural connectivity, and market price declines—exacerbated by duty-free imports—highlight challenges for India’s 6 million cotton farmers, including those in Tamil Nadu’s southern cotton belt. The app’s success could stabilize farmer incomes, but its digital shift risks excluding tech-averse or connectivity-constrained farmers.

Latest Developments Driving the App Launch

The Kapas Kisan app was introduced to address inefficiencies in traditional procurement, where farmers faced long waits at CCI centers. The app’s launch coincides with a turbulent cotton market, worsened by the government’s import duty waiver to ease US trade tensions, which has led to a ₹2,000 per candy (356 kg) price drop since August 2025. Key developments include:

• Kapas Kisan App Features: Farmers register with personal and crop details, book slots, and receive SMS payment notifications via the National Automated Clearing House (NACH). The app, available in nine regional languages, uses blockchain for QR-code-based bale traceability.
• Price Concerns: The MSP for cotton is ₹8,110 per quintal, but open market prices range from ₹6,500-7,500 per quintal due to cheaper imports, forcing reliance on CCI’s 508 procurement centers.
• Procurement Scale: CCI procured 100 lakh bales (38% of arrivals) by March 31, 2025, at ₹37,450 crore, with Telangana (40 lakh bales) and Maharashtra (30 lakh bales) leading. Tamil Nadu contributed marginally due to its smaller cotton acreage.
• Trade Dynamics: Cotton imports surged to $1.04 billion (April-January 2024-25) from $518.4 million the prior year, driven by low global prices (e.g., Brazilian cotton at 60-65 cents/pound vs. India’s 80-85 cents). Exports fell from $729.4 million to $660.5 million.
• Farmer Concerns: In Vidarbha, farmers like Nitin Khadse fear digital hurdles, citing past struggles with the E-Peek Pahani app. Only 30% of farmers are estimated to be tech-savvy, with rural connectivity issues persisting.

Tamil Nadu’s Role

Tamil Nadu, a smaller cotton-producing state (1-2% of India’s 294 lakh bales), grows cotton in districts like Madurai and Salem. The app could streamline procurement for its farmers, but the state’s textile hubs in Coimbatore and Tiruppur benefit more from cheaper imported cotton, boosting yarn and garment exports. Tamil Nadu’s digital infrastructure supports app adoption, but rural farmers face connectivity challenges.

Historical Context of India’s Cotton Market

India, the second-largest cotton producer after China, cultivates cotton across 10 million hectares, supporting 6 million farmers and the textile industry. The sector has faced volatility due to pests, policy shifts, and global competition:

• 2002-2014: Bt cotton adoption tripled production from 13.6 million bales (mb) to 39.8 mb, boosting exports from 0.8 mb to 117 mb. Tamil Nadu adopted Bt hybrids, but yields remained lower than in Gujarat.
• 2014-2024: Pink bollworm (PBW) resistance reduced yields to 450 kg/ha (vs. Brazil’s 1,800 kg/ha), with production falling to 294 mb in 2024-25, the lowest since 2008-09. Tamil Nadu saw PBW damage from 2017.
• 2019-2023: CCI procured 10-100 mb annually to stabilize prices, but high MSP (₹7,521 in 2023-24) and low global prices led to unsold stocks and losses (₹700 crore estimated in 2025).
• 2024-2025: The duty waiver and Kapas Kisan app reflect efforts to balance textile industry needs with farmer support, though farmers criticize the government for prioritizing trade over MSP enforcement.

This history underscores the tension between farmer welfare and industry demands, with Tamil Nadu’s textile sector often benefiting at farmers’ expense.

Future Scopes and Projections

The Kapas Kisan app aims to procure 120 lakh bales in 2025-26, covering 40% of estimated production (300 mb). The government’s five-year Mission for Cotton Productivity, announced in the 2025-26 Budget, targets higher yields via GM seeds and technology. Cotton prices are projected to stabilize at ₹55,000-60,000 per candy by December 2025 if import duties are reinstated.

Long-Term Strategic Outlook

By 2030, India aims to boost cotton yields to 600 kg/ha and production to 350 mb, supported by:

• Digital Tools: Scaling apps like Kapas Kisan and AI-based advisory systems for pest and weather alerts.
• GM Technology: Approving PBW-resistant Bt hybrids (e.g., Ajeet Seeds’ cry2Aa) to counter pest losses.
• Sustainability: Promoting organic cotton and drip irrigation, with Tamil Nadu’s farmers adopting bio-pesticides via collectives like the Somnath Farmer Producer Organisation.
• Export Recovery: Leveraging lower US tariffs (27% vs. China’s 54%) to boost textile exports, with Tamil Nadu’s Tiruppur targeting $5 billion in garment exports.

Potential Challenges

• Digital Divide: Only 30-40% of farmers, especially in rural Tamil Nadu, have smartphone access or reliable internet, risking exclusion from app-based procurement.
• Price Volatility: Continued duty waivers could keep market prices below MSP, with CCI losses projected at ₹1,000 crore if imports persist.
• Pest and Climate Risks: PBW and erratic monsoons threaten yields, with Tamil Nadu’s 2017 losses highlighting vulnerabilities.
• Farmer Debt: Cotton belts like Vidarbha and Tamil Nadu report high indebtedness, with farmer suicides linked to low prices and high input costs.

Impacts on the Indian Economy and Stakeholders

The Kapas Kisan app and price dynamics will reshape India’s cotton ecosystem, with Tamil Nadu’s textile industry gaining while farmers face challenges.

Sector-Wise Impacts

Agriculture and Farmers

• Impact: The app ensures MSP (₹8,110/quintal), protecting farmers from distress sales, but digital barriers may limit access. Tamil Nadu’s small cotton farmers (50,000-60,000) benefit marginally due to low acreage.
• Economic Contribution: CCI’s ₹37,450 crore procurement supports 21 lakh farmers, with Tamil Nadu contributing <1% but gaining from textile demand.
• Business Opportunities: Agri-tech firms offering digital training and bio-pesticides will see demand, with Tamil Nadu’s startups supporting adoption.

Textile and Apparel

• Impact: Cheaper imported cotton (₹50,000/candy) boosts Tamil Nadu’s textile hubs (Coimbatore, Tiruppur), lowering yarn costs by 5-10% and enhancing export competitiveness.
• Economic Contribution: The sector could add Rs 10,000 crore to GDP, with Tamil Nadu contributing 30% via exports ($3 billion annually).
• Business Opportunities: Mills like KPR Mill and exporters in Tiruppur will scale production, leveraging duty-free imports.

Technology and Digital Services

• Impact: The app’s blockchain and Aadhaar integration drives digital adoption, but rural connectivity limits scalability in Tamil Nadu’s cotton belts.
• Economic Contribution: Digital tools could add Rs 500 crore to Tamil Nadu’s tech sector via app support and training.
• Business Opportunities: IT firms in Chennai will develop rural connectivity solutions, supporting CCI’s digital initiatives.

Financial Markets

• Impact: Textile stocks like KPR Mill rose 2% post-duty waiver, but CCI’s losses dent investor confidence in public sector entities.
• Economic Contribution: The sector could attract $1 billion in FDI for textiles, with Tamil Nadu drawing 20% for mill upgrades.
• Business Opportunities: Banks in Tamil Nadu will finance textile MSMEs, leveraging lower input costs.

Cotton Market Snapshot (2024-25)

This table highlights market dynamics and Tamil Nadu’s dual role as a minor producer and major textile hub.

Frequently Asked Questions (FAQs)

What is the Kapas Kisan app?

Launched by CCI on August 28, 2025, it allows cotton farmers to register, book procurement slots, and sell at MSP (₹8,110/quintal), using blockchain for transparency.

Why was the app introduced?

It streamlines procurement amid falling cotton prices (₹6,500-7,500/quintal) due to a temporary import duty waiver, ensuring farmers get MSP and reducing distress sales.

How does Tamil Nadu benefit?

Tamil Nadu’s textile industry gains from cheaper imported cotton, boosting exports, while its small cotton farmers access MSP via the app, though digital hurdles persist.

What are the price concerns?

The 11% import duty removal (August 19-September 30, 2025) lowered prices to ₹50,000-51,000/candy, below CCI’s ₹56,000-57,000, forcing farmers to rely on MSP procurement.

What challenges does the app face?

Low digital literacy (30% tech-savvy farmers), poor rural connectivity, and potential CCI losses (₹700-1,000 crore) due to unsold stocks are key hurdles.