The government on Thursday, August 28, 2025, extended duty-free import of cotton by three more months till December 31 to support textile exporters facing steep 50% tariffs in the U.S. File
Indian textile industry can import cotton without duty till the end of December this year, said a statement from the Finance Ministry on Thursday (August 28, 2025).
The government announced on August 18 that the 11% import duty will be suspended till September 30 when the current cotton marketing season will end. The statement on Thursday (August 28, 2025) said that in a move to support exporters, it has decided to extend the duty-free import till December 31, 2025.
India is expected to close the current cotton season (October 1, 2024 to September 30, 2025) with nearly 40 lakh bales of imports. The new crop arrivals for the next season (October 1, 2025 to September 30, 2026) are likely to pick up after Deepavali.
The government had increased the minimum support price for cotton by 8% for the next season and the Cotton Corporation of India is gearing up for MSP operations across the cotton growing hubs. It purchased close to 100 lakh bales this season.
The textile and apparel sector that is staring at uncertainties because of the 50% U.S. tariff has welcomed the extension of time for duty free cotton imports.
“India will get access to quality cotton at the right prices. We are importing only because there is shortage of cotton. The crop is the lowest this year. So, farmers will not be affected by this move,” said Ravi Sam, vice chairman of Cotton Textiles Export Promotion Council.
Further, the Indian textile industry is asking for removal of the import duty for the last four years. With the industry having access to raw material at affordable price, the demand for cotton will go up and the Indian farmers will benefit, he said.
Jaipal, a cotton farmer in Telangana, said the farmers will be hit because not just the industry, but traders will also import cotton. Every year, cotton production and productivity are declining. The government is not looking at the welfare of the farmers, he said.
Ajay Srivastava, founder of the Global Trade Research Initiative, said India mostly imports cotton with fibre length more than 26 mm that is used largely by the exporters. Though the U.S. is the second largest cotton supplier for India, next to Australia, suspension of the import duty on cotton is not related to the ongoing tariff issue, he said.
Published – August 28, 2025 09:47 am IST
