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Key Points

The Indian government has extended the cotton import duty exemption until December 2025 to help the textile sector cope with new US tariffs. This move comes after the US imposed a 50% tariff on Indian goods that took effect in late August. The extension aims to ensure adequate cotton supply and maintain competitiveness for exporters facing one of their gravest crises. The measure is crucial for protecting millions of jobs in an industry that employs over 100 million people directly and indirectly.

Key Points: India Extends Cotton Import Duty Exemption to 2025 Amid US Tariffs

  • Extension counters 50% US tariff on Indian goods effective August 27
  • Aims to ensure adequate cotton supply for domestic textile industry
  • Protects nearly 35 million jobs in cotton value chain
  • Supports India's target of $100 billion textile exports by 2030
3 min read

Extension of cotton import duty exemption provides lifeline for India's textile sector: CITI

India extends cotton import duty exemption until Dec 2025 to counter US tariffs, providing critical relief to textile sector and safeguarding millions of jobs.

"This step will ensure factories can run longer and dilute chances of immediately putting countless jobs at risk - Rakesh Mehra, CITI Chairman"

New Delhi, August 28

The Confederation of Indian Textile Industry (CITI) praised the Indian government's decision to extend the exemption of import duty on cotton until December 31, 2025. "CITI would like to extend its deep gratitude to the Hon'ble Prime Minister, all other concerned authorities and different Ministries, especially the Finance, Textile, Agriculture and Commerce Ministries, for providing this lifeline to the textile and apparel sector at this critical juncture," said CITI Chairman Rakesh Mehra, in a press release.

The move comes after the 50 per cent tariff imposed by the United States on Indian goods that took effect on August 27. To provide relief to the textile sector from US tariffs, the Central Government announced on Thursday that it will extend the exemption of import duty on cotton until December 31, 2025.

The move is aimed at ensuring adequate availability of cotton for the domestic textile industry, according to a Ministry of Finance press release.

The release noted, "To augment availability of cotton for the Indian textile sector, the Central Government had temporarily exempted the import duty on cotton from 19th August 2025 till 30th September 2025. In order to support exporters further, the Central Government has decided to extend the import duty exemption on cotton (HS 5201) from 30th September 2025 till 31st December 2025."

Mehra emphasized that the government's step would strengthen the entire value chain of textiles and garments. "The balanced approach taken by the authorities will benefit all stakeholders in the textile and apparel value chain. It will go a long way in helping India's textile and apparel exporters at a time when we are confronted with possibly one of the gravest crises we could have ever encountered," he noted. He further added that this measure will help improve competitiveness by ensuring easier access to cotton.

The United States is India's single largest market for textiles and apparel, accounting for nearly 28 per cent of the sector's overall exports. The sudden tariff hike threatens to disrupt this key market, putting pressure on factories and potentially risking job losses across the industry.

"From a societal perspective, this step taken by the authorities will to an extent ensure factories can run for longer and somewhat dilute the chances of immediately putting countless jobs and livelihoods at risk," Mehra pointed out.

India's textile and apparel industry is one of the country's largest employers, engaging over 100 million people directly and indirectly. Within this, the cotton value chain alone employs around 35 million.

With India targeting textile and apparel exports of USD 100 billion by 2030, the exemption on cotton imports is seen as a vital measure to sustain momentum.

- ANI

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Reader Comments

P
Priya S
While this helps in short term, we need to focus on improving cotton productivity in India. Why are we dependent on imports when we are one of the largest cotton producers? Farmers need better support and technology.
M
Michael C
Smart move by India to counter the US tariffs. The textile sector employs millions and this protection was necessary. Hope this helps maintain India's competitive edge in global markets.
S
Sneha F
My father works in a textile mill in Coimbatore. This news brings some relief to our family. The uncertainty was causing stress for thousands of workers. Thank you for thinking about livelihoods! 🙏
A
Aditya G
Good step but temporary solutions won't help in long run. We need better trade diplomacy and stronger bilateral agreements. The US is our largest market and we can't keep reacting to their tariff decisions.
K
Kavya N
This will help control cotton prices in domestic market too. The volatility was affecting everyone from farmers to retailers. Hope this brings some stability to the sector. 👍

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