India Removes Duty On Cotton Imports Till Sept. 30 Amid US Tariff Pressure

The government has scrapped the 11% import duty on raw cotton for a period of 42 days, up to September 30, in a bid to provide temporary relief to the textile industry grappling with higher input costs and fresh tariff challenges from the US.

A gazette notification issued late Monday said the exemption was being granted as a “necessary” measure and “in public interest.” The move is expected to benefit the entire textile value chain, including yarn, fabric, garments, and made-ups, by easing cost pressures at a critical time.

The decision comes as Indian exporters face additional tariff headwinds in their key US market. Industry representatives had flagged that elevated cotton prices, coupled with duty structures, were eroding competitiveness in labour-intensive sectors such as apparel and home textiles.

By removing the duty temporarily, the government aims to stabilize cotton prices, thereby reducing inflationary pressure on finished textile products, support export competitiveness of Indian textile products by lowering production costs and protect small and medium enterprises (SMEs) in the textile sector, which are more vulnerable to price fluctuations.

The textile and apparel industry, one of India's largest employers, has been under stress due to volatile global cotton prices and weak external demand.

Global Trade Research Initiative, an Indian think-tank, said the move will help tackle tight supplies and stabilize prices ahead of the harvest season.

"The waiver will help mills facing high input costs and support yarn and fabric exporters ahead of festive season. The relief is limited to 40 days to avoid sustained downward pressure on domestic cotton prices, which could hurt farmers," Ajay Srivastava, founder of GTRI, said.