The Central Government of India on Monday extended the exemption of cotton import duty (HS 5201) until December 31, 2025. This move aimed at ensuring raw material availability for the textile industry and providing relief to exporters facing global trade challenges.
The decision follows the imposition of 50% tariffs by the United States, set to take effect on Wednesday, which will push the effective duty on Indian apparel exports to 64%. Industry representatives warned that the new trade barrier could severely affect shipments to the U.S., India’s largest garment export market.
The government had earlier waived the 11% duty on raw cotton between August 19 and September 30, 2025. The latest extension adds three more months to the duty-free window, giving additional support to the sector.
“The removal of the import duty on cotton, though only for a brief period, signals the government’s strong commitment to help India’s textile sector become stronger and more globally competitive,” said Rakesh Mehra, chairman of the Confederation of Indian Textile Industry (CITI).
Industry associations, including CITI, had repeatedly sought the removal of import duty to help exporters cope with volatile cotton prices and weakening overseas demand. The textile sector, which employs nearly 35 million people in the cotton value chain and accounts for about 80% of India’s textile exports, has been under mounting strain since the U.S. imposed an additional 25% tariff on Indian goods earlier this month.
Exporters fear that ongoing trade disruptions could hinder India’s target of doubling textile and apparel exports to $100 billion by 2030. According to the Apparel Export Promotion Council (AEPC), the U.S. accounted for around one-third of India’s ready-made garment exports in 2024.
The Central Board of Indirect Taxes and Customs (CBIC) formally issued the notification on the extension, offering much-needed relief to the sector as it braces for further uncertainty in global markets.
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