Textile Sector Benefits from Temporary Cotton Import Duty Exemption

India's government has temporarily removed cotton import duties to increase supply and lower costs in the textile sector, boosting competitiveness. The exemption, valid for five months, responds to industry calls for cost relief amid rising cotton prices, benefiting SMEs and export potential.

The Indian government has announced a five-month exemption from customs duties on cotton imports, a move projected to enhance the supply and lower costs for the textile industry. This initiative, in effect from June 1 to October 30, is designed to bolster competitiveness and support the sector amid rising input costs.

Industry leaders hailed the decision as crucial relief. The Apparel Export Promotion Council emphasized the benefit to the entire textile value chain, particularly small and medium enterprises struggling with increased cotton and yarn prices. The Finance Ministry's notification formalized the temporary removal of duties, aiming to aid MSMEs, stabilize market conditions, and protect farmers' interests.

Amidst global market volatility, the Confederation of Indian Textile Industry noted that the prior 11% duty posed significant challenges for Indian textiles compared to Asian competitors. By removing this hurdle, Indian exporters can better capitalize on opportunities arising from Free Trade Agreements, with a hopeful target of USD 100 billion in exports by 2030.