India Suspends Cotton Import Duty for Five Months to Boost Textile Sector
Govt exempts cotton import duty for five months till October 30
Image: Hindustan Times
The Indian government has temporarily lifted customs duties on cotton imports for five months, effective June 1, 2026, to enhance availability and reduce costs in the textile industry. This measure aims to improve competitiveness amid global market challenges.
- 01The customs duty on cotton imports has been suspended for five months, from June 1 to October 31, 2026.
- 02This exemption is expected to lower input costs for the textile sector, benefiting manufacturers and consumers.
- 03The Confederation of Indian Textile Industry (CITI) highlighted that the previous 11% duty hindered competitiveness against countries like Bangladesh and Vietnam.
- 04India's textile exports, particularly in cotton, faced a decline, with a 1.4% contraction in readymade garment exports in 2025-26.
- 05The duty suspension is anticipated to help leverage opportunities from Free Trade Agreements (FTAs) with countries like the UAE and Australia.
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In a strategic move to support the domestic textile industry, the Indian government has announced a temporary suspension of customs duties on cotton imports for five months, starting June 1, 2026, and ending October 31, 2026. This decision aims to ensure the availability of cotton at competitive prices, which is crucial for the textile sector, particularly for small and medium enterprises (SMEs). The Confederation of Indian Textile Industry (CITI) noted that the previous 11% import duty on cotton was a significant barrier to competitiveness, especially as major competitors like Bangladesh and Vietnam enjoy duty-free access. The removal of this duty is expected to reduce input costs, thus providing relief to manufacturers and consumers alike. Furthermore, India's textile exports have faced challenges, with a reported 1.4% contraction in readymade garment exports in the last fiscal year. The government hopes that this exemption will enhance the sector's performance and help capitalize on emerging opportunities from Free Trade Agreements with countries such as the UAE and Australia.
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The suspension of the cotton import duty is expected to lower costs for textile manufacturers, potentially leading to lower prices for consumers and improved competitiveness in international markets.
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