Overview

• Extending the initial Aug 19–Sep 30 window, the Finance Ministry moved the raw cotton (HS 5201) duty waiver to Dec 31, scrapping the 5% Basic Customs Duty, 5% AIDC and the social‑welfare surcharge that together amounted to about 11%.
• The step came a day after US measures took effect on Aug 27, lifting duties on some Indian shipments to roughly 50% and squeezing apparel and home‑textile exporters.
• Industry groups welcomed the decision, with CITI saying the longer window enables new import orders given 45–50 day shipping times, while AEPC warned of order cancellations and sought support.
• Experts see a 20–25% hit to textile exports over the next six months; the duty relief is expected to narrow a 10–15% domestic‑to‑global cotton price gap and help SMEs contain costs.
• Commentators cautioned that the overlap with the Oct–Mar harvest could pressure farmer prices and described the move as a calibrated signal in US trade talks, as falling output has increased India’s reliance on imports with US suppliers likely to benefit.