Govt extends cotton import duty exemption till December 31

The government on Thursday announced an extension of the import duty exemption on cotton until December 31. This follows the initial temporary waiver introduced on August 19, which was set to expire on September 30.

The decision aims to enhance the availability of cotton for the textile sector, a critical driver of India’s export economy. By extending the duty-free import window, the government seeks to support exporters facing global competition and rising input costs.

The exemption is expected to ensure a steady supply of raw cotton, stabilise domestic prices, and enable manufacturers to meet international demand more effectively.

The Indian textile sector, one of the largest contributors to the country’s GDP, employs millions and accounts for a significant share of exports.

On August 19, the government announced removal of 11 per cent import duty on raw cotton, effective immediately, till September 30 to support the domestic textile industry.

The objective was to ease the financial burden on mills and garment manufacturers, who have been grappling with high domestic cotton prices and limited availability.

According to the Ministry of Textile, the decision was taken to enhance the availability of raw cotton in the domestic market, stabilise cotton prices and to support export competitiveness of Indian textile products by lowering production costs.

The decision was also taken to protect small and medium enterprises in the textile sector, which are more vulnerable to price fluctuations, the ministry said.