India Temporarily Waives Cotton Import Duties to Stabilize Prices and Support Textile Sector

20 August 2025, New Delhi: In a major policy move, the Government of India has announced a temporary exemption on import duties for raw cotton from 19 August to 30 September 2025. The decision is aimed at stabilizing domestic cotton prices and providing relief to the textile and apparel industry, which has been under pressure due to rising input costs and limited availability of raw cotton.

Government Notification

The Central Board of Indirect Taxes and Customs (CBIC) has officially notified the exemption. Under this measure, the 5 percent Basic Customs Duty, the 5 percent Agriculture Infrastructure and Development Cess, and the 10 percent surcharge applied on these duties have been removed. As a result, cotton imports will now attract only 11 percent duty during the exemption period. This is expected to ease the supply of cotton and lower the cost of production across the textile value chain.

The decision comes in response to persistent demands from the textile sector, which has expressed concern over increasing domestic prices and tight supplies of cotton. By reducing import duties, the government intends to boost the availability of raw cotton in the domestic market, stabilize its price levels, and ensure that the industry remains competitive in global trade. The relief is also expected to help spinning mills, garment manufacturers, and small and medium enterprises that are most affected by fluctuations in cotton prices.

Industry and Consumer Impact

The temporary duty waiver is likely to reduce the cost of raw material for yarn, fabric, garments, and made-up products, thereby easing the pressure on manufacturers. This in turn could help moderate retail prices of textiles and clothing, providing relief to consumers. Industry associations across India have welcomed the government’s move and expressed gratitude to Prime Minister Narendra Modi and Union Textile Minister Giriraj Singh for responding to their long-standing concerns.

Implications for Farmers

Although the measure primarily targets the textile sector, India’s cotton farmers may also see indirect benefits. With more stability in market prices and sustained demand from mills, farmers are expected to receive consistent and fair prices for their produce. This will enable them to plan the next cropping season with greater confidence and reduced uncertainty.

Global Significance

As one of the largest producers and exporters of cotton, India plays a vital role in the global textile supply chain. By temporarily liberalizing cotton imports, the government is not only addressing short-term domestic supply challenges but also strengthening India’s competitiveness in the international textile market. The move highlights the balancing act between supporting industry, ensuring consumer affordability, and safeguarding farmer interests in a sector that is critical to employment and exports.

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