Material Insights · Understanding the Material World

Cotton and Viscose fibre

Viscose is cellulose from wood pulp regenerated into a fibre that handles much like cotton, so the two compete for the same spinning mills and garments and are often blended. Cotton is about three times larger by volume, and in India the viscose industry runs almost entirely on imported dissolving pulp.

Cotton (commodity) and Viscose fibre (chemical): 4 relationships.

How they are linked

1. Cotton-like substitute

Substitution · Medium · Viscose can replace cotton

Viscose is made by dissolving wood cellulose and spinning it back into fibre, so it shares cotton's breathability and moisture absorption and can take its place in many yarns and fabrics.

  • 24.1 Mt virgin cotton produced, 2024, about 19% of all fibre
  • 8.4 Mt cellulosic fibres produced, 2024, about 6% of all fibre

Cotton is still about three times the size of all man-made cellulosic fibres together, so viscose can take share at the margin but cannot replace cotton wholesale. Polyester, at 59% of world fibre output of about 132 Mt in 2024, is the main competitor for both: cotton's share slipped from 20% in 2023 to 19% in 2024 while cellulosics held at about 6%.

Sources: Textile Exchange; Apparel Resources

2. Same spinning mills

Shared risk · Medium · Both sell to spinners and garment makers

Cotton and viscose staple fibre are bought by the same spinners and are often blended, so demand for both rises and falls with the textile and apparel cycle.

An Indian trade study describes viscose as a complementary input for spinners, brands and consumers rather than a pure substitute. In practice mills shift their blend at the margin as relative prices and fashion change, while a slump in garment demand hits both fibres together.

Sources: Centre for WTO Studies, Indian Institute of Foreign Trade

3. India: fibre and trade policy

Policy · High in India · Indian trade rules shape the viscose to cotton balance

India grows cotton at scale but imports most of the dissolving pulp for viscose, so trade measures on fibre and pulp, and the size of the cotton crop, decide how much each fibre is used.

  • 844 kt Indian viscose staple fibre production, 2024-25
  • 91 to 93% share of Indian rayon-grade (dissolving) pulp demand met by imports, 2023-24 to 2025-26

After anti-dumping duties on viscose staple fibre lapsed in 2021, imports rose sharply, particularly from Indonesia. The same study notes a cotton shortfall of nearly 2,000 tonnes a day, which raises the role of viscose and other man-made fibres in Indian mills.

Sources: Centre for WTO Studies, Indian Institute of Foreign Trade

4. Shift towards man-made fibres

Transition · Rising · Indian demand moving from cotton to man-made and blended fibres

Indian households are buying more man-made and blended textiles, which pulls demand towards fibres such as viscose and away from all-cotton products.

  • 52.2% share of Indian household textile spending on man-made and blended products, 2024
  • 41.2% share on cotton-based products, 2024

Demand for man-made and blended products grew fastest between 2010 and 2024 and they became the larger category. India's largest viscose maker, Grasim, reported 566 kt a year of viscose staple fibre capacity in 2019 and pointed to double-digit growth in Indian demand.

Sources: Grasim Industries; Fibre2Fashion (Textiles Committee survey)

For investors

Key learnings

  1. Viscose competes with cotton at the margin, but cotton is about three times larger, so cotton crop swings move viscose demand more than the reverse.
  2. Indian viscose producers depend on imported dissolving pulp, so their margins are exposed to pulp prices and the rupee as well as to cotton prices.
  3. Trade remedies matter: imports rose sharply, mainly from Indonesia, after anti-dumping duties lapsed in 2021, putting pressure on domestic producers.

What to track

  • Cotton price (Cotlook A index) against viscose staple fibre price in China: A widening cotton premium favours viscose in blends; a narrowing one favours cotton (Weekly · Cotlook, China fibre price reporters)
  • Dissolving pulp import prices: Higher pulp prices squeeze viscose margins in India (Monthly · DGCI&S, company results)
  • Indian cotton crop and closing stocks: A short crop pushes mills towards viscose and other man-made fibres (Monthly · Committee on Cotton Production and Consumption, Cotton Association of India)

For policymakers

Key learnings

  1. India's fibre policy has to balance cotton farmers, who gain from strong cotton demand, against spinners and viscose makers, who want cheap fibre of either kind.
  2. Viscose in India rests on imported pulp, so a cotton shortfall is offset partly by more import dependence further up the chain.
  3. Anti-dumping and quality-control measures on viscose shift the cost of fibre for downstream textile exporters as well as protecting domestic producers.

What to track

  • Viscose staple fibre imports by origin: Rising imports from Indonesia or China signal pressure on domestic producers and possible trade cases (Monthly · DGCI&S)
  • Trade remedy cases on viscose fibre and yarn: New duties raise input costs for spinners and garment exporters (As notified · DGTR, Ministry of Finance)
  • Household textile spending by fibre: Shows how fast demand is shifting away from cotton (Periodic · Textiles Committee, Ministry of Textiles)

India

India is a top cotton grower and a large viscose producer, making about 844 kt of viscose staple fibre in 2024-25, but it imports over 90% of the dissolving pulp that viscose needs.

Sources

  1. Materials Market Report 2025, Textile Exchange (2025)
  2. Global fibre output grows 6.5% in 2024, synthetics widening lead: Textile Exchange, Apparel Resources (2025)
  3. Brief 7: Viscose staple fibre, Centre for WTO Studies, Indian Institute of Foreign Trade (2026)
  4. Grasim earnings presentation Q1 FY20, Grasim Industries (2019)
  5. Demand for MMF, blended textile items grew most in 2010-2024 in India, Fibre2Fashion (Textiles Committee survey) (2025)