The government on Thursday extended the import duty exemption for cotton by three months till December 31, allowing the textile industry to avail the benefits and bring down input costs the whole festive season.
On August 19, the government had suspended the total import duty of 11% on raw cotton until September 30 to ease supply of the raw materials for the textile industry even as domestic cotton production fell to a 15-year low of 29.4 million bales in 2024-25.
Welcoming the extension of the benefit, the Confederation of Indian Textile Industry (CITI) said, "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."
The move comes a day after the US implemented a 50% tariff on Indian goods, in a major setback for the industry. The US accounts for almost 28% of India's textile and apparel exports. "Although, this is not good enough to climb the tariff wall, it will surely support all exporters for other markets and reduce losses for USA shipments," said Sanjay Jain, chairman, textile committee, at the Indian Chamber of Commerce (ICC). This will bring down the cost of different items by 1-5% depending on the extent of cotton used in a product, as international cotton is available at 10% lower than Indian cotton, he added. India sources cotton mainly from the US, Australia, Brazil, and some African countries. The country has so far imported 3.9 million bales of cotton this year. Experts expect it to reach a record 4.2 million bales.
High prices amid a fall in production have been a disadvantage for the world's second-largest cotton growing country. India's cotton exports have been declining since 2021. "Yarn exports were quite robust before 2021," said Nishat Asher, honorary secretary of Indian Cotton Federation. Exports have fallen since due to higher cotton prices within India, she added.
According to industry data, India's cotton yarn exports had declined by 6% in 2024-25 over the previous year. The cotton farmers, however, are upset about the extension of import duty exemption. "Unrestricted import of cotton can suppress the cotton prices, increasing farmers' losses," said Ganesh Nanote, a cotton farmer from Maharashtra.
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On August 19, the government had suspended the total import duty of 11% on raw cotton until September 30 to ease supply of the raw materials for the textile industry even as domestic cotton production fell to a 15-year low of 29.4 million bales in 2024-25.
Welcoming the extension of the benefit, the Confederation of Indian Textile Industry (CITI) said, "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."
The move comes a day after the US implemented a 50% tariff on Indian goods, in a major setback for the industry. The US accounts for almost 28% of India's textile and apparel exports. "Although, this is not good enough to climb the tariff wall, it will surely support all exporters for other markets and reduce losses for USA shipments," said Sanjay Jain, chairman, textile committee, at the Indian Chamber of Commerce (ICC). This will bring down the cost of different items by 1-5% depending on the extent of cotton used in a product, as international cotton is available at 10% lower than Indian cotton, he added. India sources cotton mainly from the US, Australia, Brazil, and some African countries. The country has so far imported 3.9 million bales of cotton this year. Experts expect it to reach a record 4.2 million bales.
High prices amid a fall in production have been a disadvantage for the world's second-largest cotton growing country. India's cotton exports have been declining since 2021. "Yarn exports were quite robust before 2021," said Nishat Asher, honorary secretary of Indian Cotton Federation. Exports have fallen since due to higher cotton prices within India, she added.
According to industry data, India's cotton yarn exports had declined by 6% in 2024-25 over the previous year. The cotton farmers, however, are upset about the extension of import duty exemption. "Unrestricted import of cotton can suppress the cotton prices, increasing farmers' losses," said Ganesh Nanote, a cotton farmer from Maharashtra.
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