Overview

• The Finance Ministry’s notification removes the roughly 11% levy on raw cotton—5% basic customs duty, 5% AIDC and surcharge—effective Aug. 19 through Sept. 30 for HS 5201.
• Industry bodies welcomed the relief as input costs ease, but exporters warned the 40–42 day window will mostly cover in‑transit cargo and urged an extension to help new orders.
• The move lands as U.S. tariffs on Indian apparel rise to an effective 50% from Aug. 27, with trade talks unsettled after a planned U.S. team visit on Aug. 25 was postponed.
• Farmer unions including SKM condemned the decision, warning of price depression and rural distress, while groups in Maharashtra and Andhra Pradesh demanded stronger MSP procurement and subsidies.
• Officials called the step necessary and in the public interest to stabilize prices before the October harvest; analysts note U.S. suppliers could gain as India’s cotton output falls and imports have climbed to about $1.2 billion in FY25.