The decision comes at a time when exporters are grappling with cancelled or delayed orders from US buyers following Washington’s move to impose an additional 25 per cent tariff on Indian goods.
The government’s move to scrap the 11 per cent duty on cotton imports has provided immediate relief to India’s textile industry, which has been facing heightened uncertainty due to tariff pressures in key export markets.
In a notification issued by the Central Board of Indirect Taxes and Customs (CBIC), raw cotton imports under heading 5201 will be exempted from customs duty between 19 August and 30 September. Industry associations have long sought such a measure to support exporters against global trade disruptions.
According to the Confederation of Indian Textile Industry (CITI), even a temporary duty removal demonstrates policy support for strengthening the sector’s global competitiveness. The decision comes at a time when exporters are grappling with cancelled or delayed orders from US buyers following Washington’s move to impose an additional 25 per cent tariff on Indian goods.
The cotton value chain in India employs nearly 35 million people and contributes to about 80 per cent of textile exports. Any prolonged disruption risks adverse effects on employment and foreign exchange earnings, with the industry aiming to double its shipments to $100 billion by 2030. The US remains the largest destination, accounting for 33 per cent of ready-made garment exports in 2024, as per the Apparel Export Promotion Council (AEPC).
Meanwhile, the government is implementing wider export-boosting initiatives. Minister of State for Commerce and Industry Jitin Prasada informed Parliament that strategies include incentives, trade promotion activities, and digital platforms. Under the Export Hubs Initiative, supply chain interventions have already been prepared for 590 districts, with work progressing to cover the rest, aimed at strengthening MSME participation in global trade.