The government has exempted customs duties on import of cotton from June 1 till October 30, to augment the availability of cotton for the 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.
Overall, the measure is anticipated to have a positive impact on the performance of the domestic textile industry, especially the small and medium enterprises, ensuring better availability of cotton in the market.
“The government, using its power under Section 25(1) of the Customs Act, 1962 and Section 124 of the Finance Act, 2021, has decided that cotton falling under Customs Tariff Heading 5201 will be exempt from the entire Customs Duty as well as the Agriculture Infrastructure and Development Cess (AIDC)," read the gazette notification.
In a major relief for India’s textile and apparel sector, the Centre has announced a temporary exemption from all customs duties on cotton imports from June 1, 2026, to October 30, 2026.
The move aims to improve cotton availability in the domestic market, reduce raw material costs and support textile manufacturers facing rising cotton and yarn prices.
The decision is expected to benefit the entire textile value chain, including spinning mills, garment manufacturers, exporters and consumers, officials said.
Industry experts believe that lower import costs will help stabilise cotton prices and improve the competitiveness of Indian textile products in global markets.
The Apparel Export Promotion Council (AEPC) welcomed the government’s decision, calling it a timely intervention for the sector. It urged spinning mills to pass on the benefits of cheaper imported cotton through lower yarn prices, ensuring that the entire textile ecosystem gains from the policy.
This could help garment exporters secure international orders more competitively during the upcoming export season.
India’s cotton production has been declining due to a range of policy failures. Experts said cotton production has stagnated for years largely due to a lack of new seeds, modern irrigation facilities and frequent pest attacks and diseases.
The textile industry has been repeatedly calling for the removal of the import tariff, seeking access to cheaper foreign subsidised raw material and hoping for domestic prices to fall in step.
India is the world’s second-largest producer of cotton, accounting for nearly 24 per cent of the global production. About six million farmers grow cotton and about 40-50 million workers are employed across one of the world’s largest cotton processing and clothing industries.
The textile and apparel sector contributes 2.3 per cent to the gross domestic product (GDP), 13 per cent to industrial production and 12 per cent to exports. A misstep in policy can have potentially devastating economic consequences.
The customs duty was last removed between August and September 2025, when steep US tariffs had begun hurting manufacturing and investments.
