Import Duty
Govt temporarily scraps import duty on cotton till Sept 30 amid US pressure
This story was originally published at 09:57 IST on 19 August 2025
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MUMBAI – The government has temporarily removed the 11% duty on raw cotton imports with immediate effect till Sept. 30, the finance ministry said in a notification Monday. The removal of duty comes amid industry demands to permit duty-free cotton imports amid steep 50% US tariffs on Indian goods, including textiles.
New Delhi's decision to remove import duty is expected to improve raw material availability for India's textile sector and directly benefit American exporters. The US has been urging India to remove tariff and non-tariff barriers on various farm products, including cotton, soybean, corn, and dairy products to gain market access.
The government has waived both the basic customs duty and agriculture infrastructure and development cess on cotton imports as a "necessary" measure in "public interest," the notification said.
The exemption is expected to align domestic cotton prices with international levels, provide cost relief across the textile value chain, and temporarily ease pricing pressures, Kedia Advisory said in a note.
The scrapping of 11% import duty cotton will address raw material structural issues and ensure raw material availability at internationally competitive prices for the textile industry, the Southern India Mills' Association said in a release. It has asked to rectify the inverted GST structure on man-made fibres value chain by scheduling it under the 5% GST slab, on par with the cotton value chain.
India is the sixth-largest exporter of textiles and apparel in the world and the US accounts for nearly 29% of India's textile exports. End
Reported by Afra Abubacker
Edited by Avishek Dutta
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