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41m ago

India Extends Duty-Free Cotton Imports Through December to Cushion Textile Sector From US Tariffs

The move seeks to stabilize supplies for textile exporters facing newly raised US tariffs.

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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

  • New Delhi extended the temporary exemption on raw cotton (HS 5201) to December 31, 2025, updating the August 19–September 30 waiver, with a CBIC notification expected to formalize the change.
  • The relief suspends the 5% Basic Customs Duty, 5% Agriculture Infrastructure and Development Cess, and 10% Social Welfare Surcharge, effectively removing roughly an 11% levy on cotton imports.
  • Industry bodies including CITI, SIMA, TEA and AEPC welcomed the longer window, saying it enables fresh import orders, helps stabilize prices and supports SMEs after US duties rose to as much as 50% on August 27.
  • Farm groups and some politicians warned the waiver could depress domestic prices for growers during the October–March harvest season.
  • With output sliding to roughly 29.4–30.7 million bales in 2024–25, imports have climbed to about $1.2 billion, sourced mainly from the US, Australia, Brazil, Egypt and African producers, as experts warn of a 20–25% near-term hit to textile exports.