Textile industry welcomes customs duty exemption extension for cotton

Duty Relief Extended For Cotton Imports

The Union government has extended the customs duty exemption on cotton imports until December 31, 2026. The earlier temporary relief ran from June 1 to October 31, 2026. The decision comes amid sluggish daily cotton arrivals, which stayed below 70,000 bales a day during the opening month of the 2026-27 marketing season, which runs from October 2026 to September 2027.

Industry bodies have welcomed the extension. The Confederation of Indian Textile Industry (CITI) said the waiver would support the sector's international competitiveness as it pursues a $100 billion export target by 2030. CITI chairman Ashwin Chandran noted that imported cotton does not displace domestic produce, and that imports are needed to bridge the gap left by lower domestic production. He added that the extension gives the value chain near-term predictability, helping firms control input costs, plan production cycles and meet export commitments.

Why It Matters For Business

For importers and textile manufacturers, the extension preserves a zero-duty entry route for raw cotton through the end of the calendar year. This matters for landed-cost calculations, working capital planning and pricing of export contracts. The Southern India Mills Association (SIMA) chairman, Durai Palaniswamy, said the industry likely imported about 72 lakh bales during the 2025-26 season, using the temporary exemptions to offset domestic shortage. He also pointed to a productivity gap: Indian cotton yields are around 430-440 kg per hectare, against a world average of 815 kg per hectare and over 1,500 kg per hectare achieved by more than 20 countries.

A joint study by Gherzi and the International Cotton Advisory Committee in May 2026 had said Indian industry needs a policy environment that lets it compete with Asian peers that enjoy duty-free access to international cotton. The article also notes that cotton carried no import duty during 2008-2021, a period described as beneficia…