The window for duty-free cotton imports expired on Wednesday, but no fresh notification has been issued by the Central government regarding an extension. As a result, an 11 percent customs duty has once again come into force on cotton imports from January 1.
Cotton Corporation of India (CCI) Chairman and Managing Director Lalit Kumar Gupta told Rural Voice that from January 1, 2026, a total customs duty of 11 percent is applicable on cotton imports, comprising 10 percent basic duty and 1 percent cess. Imports from Least Developed Countries (LDCs) attract a lower overall duty of 5.5 percent, which includes some African nations.
He also said that CCI is continuing procurement of cotton at the minimum support price (MSP). As of January 1, 2026, CCI has procured 6.5 million bales (170 kg each) of cotton. Procurement will continue as long as cotton of the prescribed quality is available, he added.
The reimposition of duty is expected to provide relief to cotton growers, although the textile industry had been making efforts to seek an extension of the duty-free import window. Industry players fear that the levy will make imports costlier, even as it could support prices in the domestic cotton market.
In August 2025, the Centre had issued a notification removing the 11 percent import duty on cotton until September 30, later extending the waiver till the end of December. The move was aimed at boosting domestic supply and providing relief to textile units that were under pressure due to the 50 percent tariffs imposed by the United States.
A key concern for textile mills is the decline in cotton availability. Cotton arrivals this year are at least 6 million bales (170 kg each) lower than last year, and total production is also expected to remain below 30 million bales.
The industry argues that with limited domestic supply and rising costs, the reimposition of import duty will put additional pressure on spinning and textile units. If no fresh notification is issued on duty-free imports, imported cotton will become more expensive. While this may strengthen domestic prices, it will also raise raw material costs for the textile sector.
Over the past few months, duty-free imports had enabled foreign cotton to enter the Indian market at relatively lower prices. This ensured easier access to raw material for textile units but exerted pressure on prices received by domestic farmers. With the waiver now ending, the situation may begin to change.
Due to duty-free imports, farmers were forced to sell cotton below the minimum support price. Market prices have remained between Rs 7,500 and Rs 7,700 per quintal, compared to the government-declared MSP of Rs 8,110 per quintal, resulting in significant losses for growers. Farmer organizations had therefore been demanding the reimposition of import duty on cotton.
Why the import duty was removed
India removed the 11 percent import duty on cotton in August 2025 amid international trade tensions, particularly tariff disputes with the US. The objective was to support domestic industry and address shortages of raw material. According to data from the International Cotton Advisory Committee, India had imported around 3.6 million bales of cotton by mid-September, with Brazil accounting for the largest share, followed by the US and Australia. Industry estimates suggested that cotton imports could reach nearly 5 million bales by the end of December.