The Centre's decision to exempt all customs duties on cotton imports for five months until October 30 is expected to improve cotton availability, reduce input costs, and strengthen the competitiveness of India's textile sector, the Textile Ministry said on Saturday, as reported by PTI.
Industry Welcome and Expected Benefits
Industry bodies welcomed the move, describing it as timely relief for the textile and apparel value chain. In a notification, the Finance Ministry said the import duty exemption will come into effect from June 1, 2026.
"The measure, implemented during the cotton off-season, will ensure adequate availability of cotton for the textile industry, support MSMEs, moderate input costs, and strengthen the competitiveness of Indian textiles while safeguarding farmers' interests and ensuring market stability," the Textile Ministry said.
Apparel Export Promotion Council's Perspective
The Apparel Export Promotion Council (AEPC) said the move would provide significant relief to the sector. "The measure is expected to augment the availability of cotton for the Indian textile and apparel sector and provide much-needed relief to the entire value chain," the AEPC stated.
AEPC Chairman A Sakthivel said the decision would particularly benefit small and medium enterprises that have been facing pressure from rising cotton and yarn prices. He noted that the removal of customs duty on cotton imports was the need of the hour and would help moderate domestic cotton prices.
Sakthivel urged spinning mills to pass on the benefits of lower cotton costs by rationalising yarn prices. "This will help stabilise the entire textile value chain and enable garment exporters to secure and execute export orders more competitively in the coming months," he added.
Confederation of Indian Textile Industry's View
Confederation of Indian Textile Industry (CITI) Chairman Ashwin Chandran said the 11 per cent import duty on cotton had become a hurdle for India's global competitiveness at a time when key Asian competitors already enjoyed duty-free access to cotton.
"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 said.
The duty was increasing costs across the value chain and hurting efforts to expand India's textile and apparel exports, he added.
Targets and Opportunities
India's textile exports are largely cotton-based, and the country is targeting $100 billion in textile and apparel exports by 2030. "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 concluded.
