The government on Thursday announced an extension of the temporary exemption on cotton import duty until December 31, 2025, a move aimed at easing costs for the country’s textile industry.
The Central Government had earlier exempted cotton imports from duty between August 19 and September 30. The Finance Ministry stated in a press release that the measure was being extended “to support exporters further” and that a notification would be issued shortly.
The exemption, notified by the Central Board of Indirect Taxes and Customs (CBIC), will apply to cotton classified under HS 5201.
It covers the removal of the 5 per cent Basic Customs Duty (BCD), the 5 per cent Agriculture Infrastructure and Development Cess (AIDC), and the 10 per cent Social Welfare Surcharge applicable on both. Together, the measures waive the entire 11 per cent import duty on cotton.
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Officials said the decision is expected to ease input costs across the textile value chain, from yarn and fabric to garments and made-ups, providing relief to manufacturers and consumers.
The move comes as India’s textile and apparel sector continues to show resilience despite global economic uncertainty.
Quick estimates from the Directorate General of Commercial Intelligence & Statistics (DGCIS) showed exports of major textile commodities reached $3.1 billion in July, marking a 5.3 per cent rise compared to $2.94 billion in the same month last year.
Between April and July 2025, cumulative textile exports stood at $12.18 billion, up 3.87 per cent from $11.73 billion in the corresponding period a year earlier.
The government said the extension of the exemption would bolster competitiveness in international markets while supporting the domestic industry’s growth trajectory.
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