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Key Points

The Indian government has completely waived import duty and agriculture cess on raw cotton. This decision aims to reduce production costs for domestic textile manufacturers. Industry experts believe it will improve competitiveness in global markets. The temporary relief is expected to support exports during the upcoming festive season.

Key Points: India Cotton Import Duty Cut Boosts Textile Industry Exports CAIT

  • Duty waiver aims to reduce clothing production costs through cheaper raw cotton
  • Expected to stabilize yarn prices and support small textile enterprises
  • Move addresses industry struggles with price volatility and supply pressures
  • Temporary relief from August 2025 to September 2025 to boost festive season production
2 min read

Import duty reduction on cotton will boost India's textile industry and increase exports: CAIT

Government waives cotton import duty and cess to reduce production costs, increase textile exports, and support industry competitiveness amid global challenges.

"This is a welcome step. It will boost the country's textile industry. - Praveen Khandelwal, CAIT"

New Delhi, August 19

The central Government's step of reducing import duty on cotton will boost the textile industry of the country and will increase exports according to Praveen Khandelwal, BJP MP and Secretary General of Confederation of All India Traders (CAIT).

In an exclusive conversation with ANI, Khandelwal said, "The government has abolished the import duty on cotton. The agriculture infrastructure cess has also been eliminated. This is a welcome step. It will boost the country's textile industry. Cheaper raw cotton will reduce the production cost of our clothes and increase exports. Along with increased production, India's share will also grow."

In a major relief to the textile and garment industry, the Central Government on Monday announced a complete waiver of customs duty and Agriculture Infrastructure and Development Cess (AIDC) on the import of raw cotton.

According to a notification issued by the Ministry of Finance, the exemption will be applicable on cotton falling under heading 5201 of the Customs Tariff Act, 1975. The waiver will come into effect from August 19, 2025, and remain valid till September 30, 2025.

The Finance Ministry said the decision was taken in public interest to ease raw material costs for domestic manufacturers and exporters at a time when the textile sector has been facing price volatility and supply pressures.

Industry experts believe the move will help stabilize yarn prices, improve competitiveness of Indian garments in global markets, and support small and medium enterprises in the textile value chain.

They pointed out that the textile industry has been struggling with fluctuating input costs, and this waiver will help ease some of the burden.

The textile sector has also been impacted due to the tariffs by U.S. President Donald Trump, which added further challenges for Indian exporters. The government's decision is expected to provide stability and support to the industry in facing these tariff-related issues.

The temporary duty relief is expected to bring down input costs for fabric and garment manufacturers, especially ahead of the festive season when demand for cotton-based products generally increases. With cheaper raw cotton available, production is likely to pick up, creating opportunities for higher exports.

Overall, the Centre's move is seen as timely support for the textile industry.

- ANI

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Reader Comments

P
Priya S
But what about our cotton farmers? While this helps manufacturers, I hope the government has a plan to support our farmers who might face price pressure due to cheaper imports.
M
Michael C
As someone in the export business, this is much needed relief. The Trump tariffs really hurt our margins. This temporary duty cut will help us regain competitiveness in the US market.
S
Sneha F
Great timing before the festive season! Lower production costs might mean more affordable clothing for consumers during Diwali and wedding season. 👗
A
Arjun K
Hope the benefits actually reach the small and medium enterprises. Often these policies help big players more. The government should ensure MSMEs get proper support.
K
Karthik V
This is smart economic diplomacy. By reducing input costs, we can better handle the US tariff challenges. Make in India getting stronger! 💪

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