Govt exempts cotton import duty for five months till October 30

THe Centre on sat exempted impost tariff on cotton wool imports to ensure enough availability of the raw material at competitive rates to domestic textiles industries for five months starting from Monday.“This notification shall come into force with effect from the 01st day of June, 2026, and shall remain in force up to and inclusive of the 31st day of October, 2026,” Union finance ministry said in an order.The import duty on cotton was reinstated on January 1, 2026, after a brief hiatus from August to December 2025.A government spokesperson said the government has “temporarily” exempted all customs duties on import of cotton to augment its availability for the Indian textile sector.“The temporary duty exemption is expected to reduce input costs across the textile and apparel sector, thereby providing a targeted relief to manufacturers and consumers, while also keeping the interests of domestic farmers in mind,” he said.Overall, the measure is anticipated to have a positive impact on the performance of the domestic textile industry, especially the small and medium enterprises (SMEs), ensuring better availability of cotton in the market, he added.Also Read:Can regenerative agriculture secure future of India’s cotton?Confederation of Indian Textile Industry (CITI) said the temporary removal of 11% import duty on cotton can help Indian textile and apparel sector more competitive in the international market amid global headwinds.“Amid the ongoing global volatility and uncertainty, the 11% 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,” CITI chairman Ashwin Chandran said.The cotton import duty resulted in costs going up across the value chain and had a detrimental impact on scaling India’s textile and apparel exports, he said.India’s textile exports are dominated by cotton.India competes with countries like Sri Lanka, Bangladesh and Vietnam in the price-sensitive international apparel market where margins are very thin.Even as India aims for $100 billion in textiles and apparel exports by 2030, readymade garment exports (all types) witnessed 1.4% annualised contraction in 2025-26 at $15.8 billion.Exports of cotton yarn, fabrics, made-ups, and handloom products fell by about 4% to $11.58 billion in the same period.Overall, entire textile and apparel exports declined 2.2% to $35.79 billion in that period.“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),” Chandran said.While India’s FTA with the United Arab Emirates (UAE) and Australia are operational, its FTA with Oman will come into effect from Monday and with the UK very soon.