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India Temporarily Drops Cotton Import Duty Through Sept. 30

The short waiver seeks to lower textile input costs under escalating US tariff pressure.

Before the exemption, cotton imports were subject to an 11 per cent duty.
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RAW COTTON

Overview

  • The Finance Ministry removed the 11% customs duty and the Agriculture Infrastructure and Development Cess on raw cotton imports for the period from August 19 to September 30.
  • The government termed the move necessary in the public interest, with reports noting US duties on Indian goods could reach 50% on August 27.
  • Industry bodies CITI and AEPC welcomed the relief, saying it should help align domestic cotton prices with global rates in a market where the US accounts for roughly one-third of India’s garment exports.
  • Analysts described the step as a goodwill signal that could benefit US cotton sellers, and reports say a planned August 25 visit by US negotiators was canceled with no new date set.
  • Domestic supply strains add urgency, with output estimated at about 30.7 million bales in FY25 versus 33.7 million in 2022–23 and imports rising to roughly 2.71 million bales.