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Key Points

The Indian government has extended the import duty exemption on cotton until December 2025 to help the textile sector. This move ensures adequate raw material availability for domestic manufacturers facing supply uncertainties. The extension provides crucial relief to exporters who are dealing with high US tariff rates of 50% on Indian products. The decision comes after persistent appeals from industry bodies seeking support amid challenging international trade conditions.

Key Points: India Extends Cotton Import Duty Exemption to December 2025

  • Extends cotton import duty exemption from Sept 30 to Dec 31, 2025
  • Aims to ensure adequate cotton supply for domestic textile industry
  • Supports exporters facing 50% US tariffs on Indian products
  • Follows industry appeals for relief amid uncertain supply conditions
3 min read

Govt extends import duty exemption on cotton till Dec 2025

Indian government extends cotton import duty exemption until Dec 2025 to support textile exporters facing high US tariffs and ensure raw material availability for the sector.

"It's a great move for the Indian industry - Chandrima Chatterjee, CITI Secretary General"

New Delhi, August 28

To give relief to the textile sector from the US tariffs, the Central Government on Thursday announced to extend the exemption of import duty on cotton till 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. It also stated that further notifications will follow.

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."

The government had earlier given temporary relief to the sector by exempting import duty on cotton between August 19, 2025 and September 30, 2025. Now, the exemption has been extended by another three months to support exporters and the textile sector.

Earlier, talking to ANI, Confederation of Indian Textile Industry (CITI) Chairman Rakesh Mehra had highlighted on Tuesday the importance of the textile sector in the national economy. "India's textile and apparel sector contributes around 2 per cent to the country's GDP and is also one of the biggest providers of jobs and livelihoods," he said.

He further pointed out that the United States remains the single-largest market for Indian textile and apparel items, accounting for almost 28 per cent of exports. In 2024-25 alone, India's exports of these products to the US were valued at nearly USD 11 billion. China is the largest supplier of textiles and apparel to the US, followed by Vietnam, India, and Bangladesh. At present, US tariff rates for Vietnam and Bangladesh stand at 20 per cent, considerably lower than the 50 per cent imposed on Indian product exports.

Earlier this month, textile bodies welcomed the waiver of customs duty on cotton imports until September 30, stating it would offer immediate relief to manufacturers and exporters grappling with uncertain supplies.

Chandrima Chatterjee, Secretary General of CITI, said the decision was a result of persistent appeals from industry representatives. "It's a great move for the Indian industry, and if that also gives any positive signal to the negotiations, then I think it's a win-win for both sides. But I think the primary trigger has been the repeated concern being raised by the industry bodies and the associations," she stated.

Now with the extended exemption of customs duty till 31st December 2025, the sector gets a much-anticipated relief till a negotiated trade deal is signed with the U.S.

- ANI

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Reader Comments

P
Priya S
While this helps in short term, we need to focus on long-term solutions. Why are Vietnam and Bangladesh getting 20% tariffs while we face 50%? Need better trade negotiations with US 🇮🇳
S
Sarah B
As someone working in textile exports, this extension is a huge relief. The uncertainty was making it difficult to plan orders. Hope this leads to a permanent trade deal soon!
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Arjun K
Textile sector employs millions of Indians, especially in smaller towns. Protecting these jobs is crucial. Hope the government continues supporting this vital industry 💪
K
Karthik V
But what about our cotton farmers? While helping exporters is good, we must ensure domestic farmers don't suffer due to cheap imports. Need balanced approach
M
Michael C
$11 billion exports to US is significant! This duty exemption will help maintain that momentum. Smart economic decision at the right time 👍

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