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
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.
Earlier, on August 18, the Finance Ministry had allowed duty exemption on cotton imports from August 19 till September 30.
In a statement on Thursday (August 28, 2025) the Ministry said, “In order to support exporters further, the Central government has decided to extend the import duty exemption on cotton (HS 5201) from September 30, 2025 till December 31, 2025.”
This includes exemption from both the 5% Basic Customs Duty (BCD) and the 5% Agriculture Infrastructure and Development Cess (AIDC), as well as a 10% Social Welfare Surcharge on both, which led to a cumulative 11% import duty on cotton.
The move is expected to lower input costs across the textile value chain, encompassing yarn, fabric, garments, and made-ups and provide much-needed relief to manufacturers and consumers alike.
Effective from August 27, the U.S. has imposed a 50% duty on Indian goods, including textiles, gems and jewellery, and leather.
The duty exemption would enhance the availability of raw cotton in the domestic market, stabilise cotton prices, and thereby reduce inflationary pressure on finished textile products.
It would support the export competitiveness of Indian textile products by lowering production costs and protecting Small and Medium Enterprises (SMEs) in the textile sector, according to the government.
Published – August 28, 2025 09:47 am IST
