New Delhi: The Central Government has announced a temporary exemption on cotton imports by removing all customs-related levies for a five-month period beginning June 1, 2026. The move is aimed at improving the availability of raw cotton for domestic textile manufacturers and reducing input costs for the industry.
According to a notification issued by the Finance Ministry on Saturday, imported cotton will be exempt from both the basic customs duty and the Agriculture Infrastructure and Development Cess (AIDC). The exemption will remain in force until October 30, 2026.
The decision is expected to provide significant relief to textile producers that depend heavily on cotton as a key raw material. Industry stakeholders have long sought measures to ensure adequate cotton supply and stabilise raw material costs amid fluctuating domestic production and price movements.
Government cites public interest
In its notification, the Finance Ministry stated that the exemption was being granted in the public interest. The notification said that imported cotton would be exempt from the entire customs duty levied under the Customs Tariff Act as well as the Agriculture Infrastructure and Development Cess.
The temporary waiver is expected to make cotton imports more economical for businesses, allowing manufacturers to source raw material from international markets at lower costs. The move comes at a crucial time as textile companies prepare for upcoming production cycles and seek to maintain uninterrupted manufacturing operations.
By easing the financial burden associated with cotton imports, the government aims to support one of India’s largest employment-generating sectors, which contributes significantly to exports and economic growth.
Textile industry likely to gain
India’s textile industry has repeatedly raised concerns about cotton availability and rising input costs. Industry representatives have argued that easier access to imported cotton would help ensure steady production and prevent disruptions caused by supply shortages.
The latest duty exemption is expected to improve the competitiveness of textile manufacturers by reducing procurement expenses. Lower raw material costs could also enhance operational efficiency and provide companies with greater flexibility in planning their production and purchasing strategies.
Export-oriented textile businesses, in particular, may benefit from improved access to competitively priced cotton, helping them maintain their position in global markets. The move is also likely to support spinning mills and garment manufacturers that rely on consistent cotton supplies throughout the year.
Duty-free imports until October 30
The exemption will remain effective for imports made between June 1 and October 30, 2026. During this five-month window, importers will not be required to pay either the basic customs duty or the Agriculture Infrastructure and Development Cess on cotton shipments entering India.
Industry experts believe the measure could encourage higher cotton imports during the period, thereby improving domestic availability and easing pressure on local supply chains. Increased imports may also help moderate price volatility in the domestic market.
The temporary nature of the exemption indicates that the government intends to address immediate supply concerns while monitoring market conditions over the coming months. Depending on the impact of the measure and future cotton availability, policymakers may review the situation before the exemption period concludes.
Boost for manufacturing and exports
The textile and apparel sector remains one of India’s most important industries, providing employment to millions of people and contributing substantially to export earnings. Ensuring adequate availability of raw cotton is critical for maintaining production levels across the value chain.
With duty-free imports now permitted for five months, textile manufacturers are expected to benefit from improved access to raw materials and reduced procurement costs. The measure is likely to support production activity, strengthen supply chains and improve the industry’s overall competitiveness.
As the exemption takes effect from June 1, industry participants will closely monitor its impact on cotton prices, import volumes and manufacturing performance in the months ahead.
Conclusion
The Centre’s decision to waive customs duty and AIDC on cotton imports until October 30, 2026, is expected to provide timely support to India’s textile sector. By facilitating cheaper imports and improving raw material availability, the move aims to strengthen manufacturing operations, support exports and enhance the competitiveness of textile businesses across the country.