Centre Extends Duty-Free Cotton Imports Until December
Duty-free cotton imports extended to December
The Central Government has extended duty-free cotton imports by three months, from September 30 to December 31, 2025, to bolster India’s textile industry amid steep 50% tariffs imposed by the US. The decision, announced by the Finance Ministry, waives the 5% Basic Customs Duty (BCD), 5% Agriculture Infrastructure and Development Cess (AIDC), and 10% Social Welfare Surcharge, previously resulting in an 11% cumulative import duty on cotton (HS 5201).
This extension follows an earlier exemption from August 19 to September 30, aimed at easing input costs for textile exporters facing US tariffs on goods like textiles, gems, and leather, effective August 27. The ministry stated that the move will enhance raw cotton availability, stabilize prices, and reduce inflationary pressure on yarn, fabric, garments, and made-ups. This is expected to lower production costs, benefiting manufacturers, consumers, and small and medium enterprises (SMEs) in the $165 billion Indian textile sector, which employs over 45 million people.
The exemption aligns with India’s strategy to maintain export competitiveness, especially as the US tariffs threaten the $16 billion textile export market. Industry leaders welcomed the decision, noting that cheaper cotton imports from countries like Australia and Brazil will support spinning mills and weavers. The government also aims to protect jobs and ensure affordability of textile products domestically, with further measures under consideration to counter global trade challenges.
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