Why has the government removed cotton import duty till October? Here's what it means

The Centre has exempted customs duty on cotton imports for five months beginning June 1, a move aimed at improving raw material availability for the domestic textile sector and easing cost pressures on manufacturers.

The Union Finance Ministry issued a notification on Saturday announcing that the exemption will remain effective till October 31, 2026.

“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,” the Ministry said in the order.

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The import duty on cotton was restored to 11 per cent from January 1 this year after remaining suspended between August and December 2025.

Relief for textile manufacturers

According to a government spokesperson quoted by Hindustan Times, the exemption has been introduced on a temporary basis to improve cotton availability for India’s textile industry.

“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 was quoted as saying by HT.

Industry bodies believe the move could help exporters compete better in global markets, especially at a time when demand conditions remain uncertain.

Industry sees boost to exports

Per HT, Confederation of Indian Textile Industry (CITI) chairman Ashwin Chandran said the earlier 11 per cent duty had weakened India’s competitiveness compared to other Asian textile exporters.

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“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 was quoted as saying by HT.

India competes with countries such as Bangladesh, Sri Lanka and Vietnam in the international apparel market, where pricing remains critical.

Despite India’s target of achieving $100 billion in textile and apparel exports by 2030, exports remained under pressure in 2025-26. Ready-made garment exports fell 1.4 per cent to $15.8 billion, while cotton yarn, fabrics, made-ups and handloom exports declined nearly 4 per cent to $11.58 billion.

“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.