Government Temporarily Waives Cotton Import Duties to Support Textile Industry

Temporary Duty Exemption on Cotton Imports

The Indian government has declared a temporary suspension of customs duties on cotton imports, effective from June 1, 2026, for a duration of five months. This initiative aims to enhance the availability of raw cotton for local textile manufacturers and assist the sector in managing production costs more efficiently. A notification from the Finance Ministry released on Saturday confirmed that imported cotton will be free from both the basic customs duty and the Agriculture Infrastructure and Development Cess (AIDC) until October 30, 2026.

This decision is a significant relief for textile producers who depend heavily on cotton as a primary raw material. By eliminating import duties, the government seeks to make the acquisition of foreign cotton more affordable and ensure a steady supply during the forthcoming production cycle.

The Finance Ministry's announcement stated, "The Central Government, recognizing the necessity in the public interest, exempts cotton imported into India from all customs duties under the Customs Tariff Act and from the entire Agriculture Infrastructure and Development Cess." This exemption is anticipated to boost imports, especially as industry stakeholders have been calling for measures to enhance the availability of raw materials.

Textile Sector Set to Gain

Concerns regarding cotton supply and pricing have been a recurring theme in India's textile industry. Participants in the sector have argued that improved access to imported cotton could help sustain production levels and alleviate pressures from fluctuating domestic supplies. With the duty exemption now in effect, textile manufacturers may find it easier to source cotton at reduced costs, potentially enhancing their competitiveness and operational efficiency. This move is also expected to provide companies with greater flexibility in planning their purchases for the upcoming manufacturing season.

Duty-Free Period Until October 30

The exemption will be in place for five months, covering imports from June 1 to October 30, 2026. During this timeframe, importers will not be liable for either the basic customs duty or the Agriculture Infrastructure and Development Cess on cotton shipments entering India.