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3w ago

India Extends Duty-Free Cotton Imports Through December 31, 2025

The move suspends roughly 11% in levies on raw cotton to let mills place fresh orders under new 50% US duties.

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The predominantly cotton based textile industry in Tiruppur had said that exempting 11% import duty on all varieties of cotton from 19th August to 30th September was not enough and had appealed to the Union government for a further time extension. (REUTERS)
A worker feeds raw cotton into an opener machine at a processing facility in Amritsar
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Overview

  • The Finance Ministry prolonged the HS 5201 exemption set to end on September 30 to December 31, 2025, waiving the 5% Basic Customs Duty, 5% Agriculture Cess and the related surcharge that together equaled about an 11% import duty.
  • Textile bodies including CITI, SIMA and TEA said the extension enables new contracts, stabilises yarn and garment costs and offers partial relief to exporters facing sharply higher charges in their top market.
  • Farmer groups such as SKM and the BJP-affiliated BKS urged a rollback, warning cheaper imports could pressure prices as the October harvest begins; market rates have already eased and opponents fear further declines.
  • The announcement came a day after Washington’s higher tariffs took effect, with industry estimating a 20–25% hit to India’s textile exports over the next six months and analysts noting the US could be a key supplier benefitting from India’s waiver.
  • Domestic cotton output has fallen to an estimated 30.7 million bales and closing stocks are tight, pushing FY25 imports up to about 2.71 million bales worth roughly $1.2 billion from suppliers including the US, Australia, Brazil and Egypt, with some experts projecting a record near 4.2 million bales this year.