In a major relief to India's textile and apparel industry, the Centre on Saturday exempted cotton imports from all customs duties for five months, from June 1 to October 31, 2026, aiming to improve domestic availability of the fibre and reduce input costs for manufacturers.
The decision was announced by the Department of Revenue under the Finance Ministry through a notification issued on May 30. Under the exemption, imported cotton will be free from both the Basic Customs Duty and the Agriculture Infrastructure and Development Cess (AIDC) during the specified period.
The move effectively removes the existing 11 percent import duty on cotton, a long-standing demand of the textile industry, which has been grappling with elevated domestic cotton prices and supply constraints.
According to the Finance Ministry notification, the duty-free import window will remain in force until October 31, 2026. The exemption is expected to facilitate greater imports of cotton and ensure adequate raw material availability for the country's spinning, textile and garment sectors.
Textile Industry Welcomes Decision
Welcoming the decision, the Ministry of Textiles said the removal of all customs duties on cotton imports would help ensure sufficient supply of the fibre to the industry, lower production costs and enhance the global competitiveness of Indian textiles and apparel exports.
Industry bodies also hailed the announcement, describing it as a much-needed relief for textile and garment manufacturers facing rising raw material costs and increasing competition in international markets.
The government’s decision comes at a time when cotton prices in both domestic and global markets have remained relatively firm, increasing the cost burden on textile producers. Industry representatives had repeatedly urged the government to suspend import duties to bridge the domestic supply gap and improve access to competitively priced cotton.
Apparel Export Promotion Council (AEPC) Chairman A. Sakthivel said that the temporary duty exemption is expected to reduce input costs across the textile and apparel sector, improve cotton availability, and enhance the competitiveness of Indian textile and apparel exports. The decision will particularly benefit small and medium enterprises, which have been facing challenges due to the sharp increase in cotton and yarn prices.
Garment Exporters and Manufacturers Association (GEMA) President Vijay Jindal welcomed the decision, stating that cotton prices in the domestic market had risen by 30–40 percent over the past six months. Exports of cotton to Bangladesh and China had also contributed to higher domestic prices. As a result, garment exports had become less competitive. The removal of import duty, he said, would provide much-needed relief to the industry.
Concerns for Cotton Growers
However, while the move is expected to benefit textile mills and exporters, it could create challenges for cotton growers. Increased inflows of duty-free cotton from overseas markets may exert downward pressure on domestic cotton prices, potentially affecting farmers' earnings.
The decision has come during the ongoing cotton sowing season, raising concerns among farmer groups that lower market prices later in the season could reduce returns from the crop.
Cotton Imports Rising
According to the Cotton Association of India, India imported 6.74 lakh tonnes of cotton during the first six months of the 2025-26 cotton season (October-September), almost matching the 7.03 lakh tonnes imported during the entire 2024-25 season.
Cotton imports have risen sharply in recent years. India imported 2.58 lakh tonnes in 2023-24, 2.48 lakh tonnes in 2022-23, 3.59 lakh tonnes in 2021-22 and 1.87 lakh tonnes in 2020-21.
This duty waiver is expected to boost cotton imports further in the coming months, helping the textile industry secure raw material supplies. However, its impact on domestic cotton prices and farmer incomes will be closely watched as the new crop season progresses.