The Central government has extended the duty-free import of cotton until December 31, 2025, in an effort to support textile exporters who are facing a steep 50% tariff imposed by the United States.
Earlier, on August 18, the Finance Ministry had announced duty exemption on cotton imports from August 19 to September 30. The latest extension pushes the benefit further by three months.
The exemption covers the 5% Basic Customs Duty (BCD), 5% Agriculture Infrastructure and Development Cess (AIDC), and the 10% Social Welfare Surcharge, which together amounted to an 11% import duty on cotton. By removing these charges, the government aims to lower input costs for the textile value chain, including yarn, fabrics, garments, and made-ups.
Officials said the decision will improve raw cotton availability in the domestic market, stabilize prices, and ease inflationary pressure on textile products. It is also expected to enhance the global competitiveness of Indian textile exports while safeguarding Small and Medium Enterprises (SMEs) in the sector.
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