Centre extends import duty exemption on cotton till December 31

Before the exemption, cotton imports were subject to an 11 percent duty.

The Central government announced its decision to extend the import duty exemption on cotton from September 30, 2025 to December 31, 2025, a statement said on August 28.

Earlier, the government had exempted all customs duties on the import of raw cotton from August 19 to September 30 in an effort to stabilise the domestic prices and to back the textile industry.

"The decision, notified by the Central Board of Indirect Taxes and Customs (CBIC), is expected to lower input costs across the textile value chain encompassing yarn, fabric, garments, and made-ups and provide much needed relief to manufacturers and consumers alike," Centre's August 19 statement had said.

The temporary suspension of the duty is seen as a relief for the country's garment industry that is reeling from a steep 50 percent tariff on exports to the US.

The US tariff comprises a base tariff of 25 percent and an additional 25 percent that came into effect on August 27, imposed as a penalty for buying Russian oil. The effective rate compares unfavourably with 20 percent for Bangladesh and Vietnam, and 30 percent for China.

Industry bodies such as the Confederation of Indian Textile Industry (CITI) had urged the government to scrap the cotton import duty to help make the sector more competitive.

Before the exemption, cotton imports were subject to an 11 percent duty.

With Reuters inputs