The Centre has exempted all customs duties on cotton imports for five months till October 30, 2026, in a move aimed at ensuring adequate availability of the natural fibre for the domestic textile industry.
The duty exemption, which comes into effect from June 1, is expected to lower input costs for textile manufacturers, improve export competitiveness and support small and medium enterprises (SMEs) across the textile value chain.
The decision comes at a time when global supply chain disruptions and rising raw material costs are putting pressure on textile manufacturers and exporters.
What Has Changed?
The government has suspended the existing 11 per cent customs duty on cotton imports until October 30, 2026. The exemption will allow textile mills and manufacturers to import cotton without paying import duties during the five-month period.
According to the government, the measure has been introduced during the cotton off-season to improve the availability of raw material while maintaining market stability and protecting farmers’ interests.
Why Has The Government Taken This Step?
India is one of the world’s largest cotton producers, but certain segments of the textile industry, especially export-oriented mills, require contamination-free cotton that is often sourced from countries such as Australia, Brazil, the United States and African nations.
The government believes the temporary duty waiver will help increase cotton availability, reduce production costs and strengthen the competitiveness of Indian textile exports in global markets.
The move is also aimed at supporting MSMEs, which have been facing pressure due to elevated cotton and yarn prices.
The textile ministry on Saturday said the Centre’s move to exempt all customs duties on cotton imports for five months till October 30 will ensure adequate availability of cotton for the textile industry, lower input costs and boost the competitiveness of Indian textiles.
Industry bodies welcomed the decision, terming it a “much-needed relief” for the apparel sector.
“The measure is expected to augment the availability of cotton for the Indian textile and apparel sector and provide much-needed relief to the entire value chain,” the Apparel Export Promotion Council (AEPC) stated.
Will Cotton Imports Rise Sharply?
India’s textile exports are dominated by cotton. India is aiming for USD 100 billion in textiles and apparel exports by 2030.
“With this temporary relief in the cotton import duty, India’s textile and apparel exporters can better leverage opportunities that are emerging from the Free Trade Agreements (FTAs),” said Confederation of Indian Textile Industry (CITI) Chairman Ashwin Chandran.
“Amid the ongoing global volatility and uncertainty, the 11 per cent import duty on cotton was acting as a major hindrance to the Indian textile and apparel sector in raising its global competitiveness since our major Asian competitors already have duty-free access to cotton,” Chandran said.
How Will The Textile Industry Benefit?
The removal of import duty is expected to provide relief across the textile and apparel value chain. Lower raw material costs can help spinning mills, fabric manufacturers and garment exporters improve margins and price their products more competitively in international markets.
What Does It Mean For Cotton Farmers?
While cheaper imports may raise concerns among farmers, the government has stated that the measure is temporary and has been designed to ensure market stability while safeguarding farmers’ interests.
“The measure, implemented during the cotton off-season, will ensure adequate availability of cotton for the textile industry, support MSMEs, moderate input costs, and strengthen the competitiveness of Indian textiles, while safeguarding farmers’ interests and ensuring market stability,” the textile ministry said.
