In a major relief to the domestic textile and apparel industry, the Central Government has extended the customs duty exemption on cotton imports by two months, making it valid until December 31, 2026. The extension, aimed at boosting the domestic availability of raw materials and softening input costs, was earlier slated to expire on October 31, 2026 in May.
“The extension is expected to help reduce input costs across the textile and apparel sector, thereby providing targeted relief to manufacturers and consumers, while also keeping the interests of domestic farmers in mind,” the finance ministry said. The measure is also expected to have a positive impact on the performance of the domestic textile industry, particularly small and medium enterprises, by ensuring better availability of cotton in the market, it added.
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The Ministry of Finance notified the decision via an extraordinary Gazette notification (No. 35/2026 - Customs) issued on Friday, October 30. Exercising powers under Section 25(1) of the Customs Act, 1962, read with Section 124 of the Finance Act, 2021, the Department of Revenue amended its earlier May 30 notification (No. 19/2026-Customs) to substitute the October deadline with December 31, 2026.
The move is designed to ensure an uninterrupted supply of cotton for textile mills and garment manufacturers, insulating them from volatile price spikes. Industry participants-particularly Micro, Small, and Medium Enterprises (MSMEs) that have faced cost pressures across value chains-are expected to benefit directly from lower raw material expenses.
According to officials, the duty-free import window will provide targeted cost relief to manufacturers and end-consumers while maintaining a balance with the economic interests of domestic cotton farmers. The increased availability of raw fibre in the open market is anticipated to improve operational capacity, output performance, and price competitiveness across the entire textile and garment ecosystem through the year-end.
READ | Govt Exempts All Custom Duties On Import Of Cotton Temporarily
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