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1h ago

India Temporarily Lifts Cotton Import Duty to Cushion Textile Sector From US Tariffs

Officials cast the six‑week waiver as short‑term cost relief for exporters facing steep US levies.

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

  • A Finance Ministry notification exempts raw cotton under heading 5201 from customs duty and AIDC from Aug. 19 through Sept. 30, scrapping the roughly 11% levy in place since 2021.
  • The step follows escalating US duties on Indian garments that are set to reach about 50%, combining an existing 25% with a further 25% due to take effect on Aug. 27.
  • Industry groups including the Confederation of Indian Textile Industry welcomed the move as aligning domestic cotton costs with global prices and easing pressure across yarn, fabric, apparel and home textiles.
  • Cotton growers and farm leaders, particularly in Maharashtra’s Vidarbha and Marathwada, protested that duty‑free imports could depress prices during new‑crop arrivals, while the Cotton Association of India said near‑term prices may hold.
  • Analysts described the waiver as a calibrated, time‑bound measure ahead of the festive season and new crop arrivals, with the decision also viewed as a goodwill signal to Washington as US‑India trade talks remain unsettled.