Five-month waiver aims to improve raw material supply for textiles.
The government has exempted cotton imports from customs duties for five months to improve raw material availability for India’s textile sector. The exemption applies to cotton under tariff heading 5201 from 1 June to 31 October 2026.
Imports during this period will attract zero basic customs duty and zero Agriculture Infrastructure and Development Cess. The Ministry of Finance notified the decision on 30 May 2026, stating that the move aims to augment cotton availability for the domestic textile industry.
The 11 per cent import duty on cotton had been affecting the competitiveness of India’s textile and apparel sector, particularly as several Asian competitors have duty-free access to cotton. The exemption comes amid concerns over a continuing demand-supply gap in the domestic cotton market.
The textile sector employs over 45 million people and contributes nearly two per cent to India’s GDP. Industry bodies, including the Apparel Export Promotion Council, have welcomed the decision as a timely intervention.
The temporary waiver is expected to reduce input costs, improve cotton availability and strengthen the competitiveness of Indian textile and apparel exports. It is also expected to benefit small and medium enterprises facing pressure from higher cotton and yarn prices.