Import duty cut to improve cotton supply: Textile Ministry

The Centre’s move to exempt all customs duties on cotton imports for five months till October 30 will ensure adequate availability of cotton for the textile industry, lower input costs and boost the competitiveness of Indian textiles, the Textile Ministry said on Saturday.

Industry bodies welcomed the decision, terming it a “much-needed relief” for the apparel 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 Apparel Export Promotion Council (AEPC) stated. In a notification, the Finance Ministry said the import duty exemption will be effective 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 stated.

AEPC Chairman A Sakthivel stated that the decision will particularly benefit small and medium enterprises, which have been facing challenges due to the sharp increase in cotton and yarn prices.

He further noted that the removal of customs duty on cotton imports is the need of the hour and will help moderate domestic cotton prices.

In this regard, he appealed to all 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, Sakthivel said.

“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,” Confederation of Indian Textile Industry (CITI) Chairman Ashwin Chandran said.

The cotton import duty was driving up costs across the value chain and having a detrimental impact on efforts to scale India’s textile and apparel exports, Chandran added.

India’s textile exports are dominated by cotton. India is aiming for USD 100 billion in textiles 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 pointed out.