Vardhman Textiles, Ambika Cotton Mills & other cotton stocks rally as Centre scraps import duty

Cotton-related stocks surge as Centre removes 11 percent import duty

Shares of cotton-related companies such as Vardhman Textiles, Gokaldas Exports, Ambika Cotton Mills, and Welspun Living rallied in the range of 1 percent to 8 percent on August 19 after the Centre removed the 11 percent import duty on raw cotton till September 30.

The Finance Ministry issued a notification through the Central Board of Indirect Taxes and Customs (CBIC), removing both the basic customs duty and the Agriculture Infrastructure and Development Cess on cotton imports. The decision offers temporary relief to the textile and garment industry, which has been facing challenges amid concerns related to the Trump tariffs.

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This development comes after months of back-and-forth between the two countries. India has stood firm on sensitive sectors such as agriculture and dairy during bilateral trade talks. By easing duty on cotton, New Delhi is signaling some flexibility without giving up its core red lines.

The government’s move is aimed at mitigating the pressure of a larger tariff of 50 percent imposed by the US government on Indian exports, the deadline for which is August 27. The exemption is expected to benefit the entire textile chain including yarn, fabric, garments, and made-ups.

Meanwhile, the US negotiating team, which was scheduled to visit New Delhi for the sixth round of trade talks on August 25, has cancelled its visit. No fresh date has been announced so far.

The move also reflects India’s domestic supply concerns. Cotton availability in the local market has been tight, with industry associations repeatedly warning about the risk of higher yarn prices and downstream cost pressures in textiles. By allowing duty-free imports, the government aims to ease raw material costs ahead of the festival season, a period when demand for garments typically rises.

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