India's Cotton Import-Duty Waiver Faces US Tariff Challenges
Can India's cotton import-duty waiver offset growing US tariff concerns?
Business Standard
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India's government has temporarily removed an 11% import duty on cotton to support textile exporters until October 30, 2026. However, a proposed 12.5% US tariff on Indian imports threatens to undermine these benefits, raising concerns about the competitiveness of India's textile sector in the US market.
- 01The import duty waiver on cotton is effective from June 1 to October 30, 2026, providing immediate cost relief to India's textile sector.
- 02The US Trade Representative has proposed a 12.5% tariff on imports from India, which could significantly impact textile exports.
- 03India's textile and apparel exports to the US account for nearly 29% of total textile exports.
- 04Experts believe that while cheaper cotton will help, it may not fully offset the impact of higher tariffs on competitiveness.
- 05Access to major markets like the US is crucial for sustaining export growth, alongside the cotton duty waiver.
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India's textile exporters received a boost with the government's temporary removal of an 11% import duty on cotton, effective from June 1 to October 30, 2026. This waiver is expected to lower raw material costs, benefiting spinning mills and yarn manufacturers. However, a proposed 12.5% tariff by the US Trade Representative on imports from India poses a significant challenge. The US is India's largest export market for textiles, accounting for 28.97% of textile and apparel exports. Experts warn that while the cotton duty waiver offers immediate cost relief, the higher tariffs could diminish competitiveness, forcing exporters to absorb additional costs. The interplay between lower cotton prices and higher tariffs highlights the importance of market access for sustaining export growth. Industry leaders emphasize that achieving favorable market access, alongside the cotton waiver, is essential for reaching India's ambitious target of $100 billion in textile exports by 2030. As global trade dynamics shift, India's textile sector's future may hinge on effective trade diplomacy and continued domestic support.
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The removal of the cotton import duty could enhance competitiveness for Indian textile exporters, but higher US tariffs may negate these benefits.
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