India Extends Cotton Import Duty Exemption to Boost Textile Sector

The Indian government has extended the exemption of import duty on cotton until December 31, 2025, to support the domestic textile industry. This move aims to alleviate the impact of US tariffs and ensure adequate cotton supply for manufacturers. Further notifications from the Ministry of Finance are expected.

In a significant move to alleviate the pressures from US tariffs on the textile sector, the Indian government announced on Thursday an extension of the import duty exemption on cotton until December 31, 2025. This decision, detailed in a Ministry of Finance press release, aims to ensure sufficient availability of cotton for domestic manufacturers.

Previously, the government had provided temporary relief by waiving the import duty from August 19, 2025, to September 30, 2025. The additional three-month extension is designed to bolster exporters and the textile sector amid ongoing economic challenges. CITI Chairman Rakesh Mehra emphasized the textile sector's crucial role in the national economy, contributing 2% to the GDP and being a significant source of employment.

With the United States as India's largest textile market, accounting for nearly 28% of exports, the extension is seen as a strategic response to the high US tariff rates of 50% on Indian products. Textile industry representatives have long advocated for this measure, and CITI Secretary General Chandrima Chatterjee lauded the government's responsiveness to industry concerns, noting its potential positive impact on trade negotiations with the US.

(With inputs from agencies.)