Trump tariff impact: The Government of India on Thursday extended the deadline until December 31, 2025, for the import duty exemption on cotton (HS 5201).
Earlier, the government had temporarily exempted the import duty on cotton from 19th August 2025 till 30th September 2025.
"To augment availability of cotton for the Indian textile sector, the Central Government had temporarily exempted the import duty on cotton from 19th August 2025 till 30th September 2025. In order to support exporters further, the Central Government has decided to extend the import duty exemption on cotton (HS 5201) from 30th September 2025 till 31st December 2025," the Ministry of Finance said in a press release posted by Press Information Bureau (PIB).
This exemption removes the usual 11 per cent import duty on cotton (HS 5201), facilitating more affordable raw material access for Indian textile mills, as per Reuters.
India-US Tariff
The additional 25 per cent tariff imposed by US President Donald Trump on India for its purchases of Russian oil came into effect on Wednesday (August 27), bringing the total amount of levies imposed on New Delhi to 50 per cent.
The sectors, which would bear the brunt of the high US import duties, include textiles, clothing, gems and jewellery, shrimp, leather and footwear, animal products, chemicals, and electrical and mechanical machinery.
Tariff Impact on the Textile Industry
The imposition of high tariffs, especially the 50 per cent tariff by the US, severely impacts the Indian textile industry by making Indian textile exports significantly less competitive in the US market.
This price increase reduces demand for Indian products, leading to halted production, loss of market share to competitors like Vietnam and Bangladesh, and risks of job losses for millions in the sector.
The tariff burden disrupts supply chains, weakens export revenue, and threatens national export targets, forcing the industry to seek urgent governmental support and diversify export markets to sustain growth and employment.
