The Indian government is considering extending the customs duty exemption on raw cotton imports beyond its October 31 expiry, potentially until at least December 2026, as it weighs continued support for the textile industry. No final decision has been taken yet, according to government and industry sources.
The Centre had introduced the current exemption from June 1 to October 31, 2026, removing customs duties on cotton imports to improve domestic availability, moderate input costs and strengthen the competitiveness of India’s textile and apparel sector.
The possible extension follows sustained calls from textile manufacturers for a more predictable cotton import policy. Industry representatives argue that domestic cotton production remains insufficient to fully meet demand and that access to competitively priced imported cotton is essential for exporters competing with countries such as Bangladesh and Vietnam.
The industry has also highlighted the need for specialised cotton varieties that are not always readily available domestically. Imports from countries including the US, Brazil and Australia help manufacturers source cotton according to quality and specification requirements.
NITI Aayog has separately recommended removing the cotton import duty, noting that higher domestic cotton prices can raise costs for spinners and weaken the competitiveness of the broader textile value chain.
The policy decision comes as India seeks to expand textile exports and take advantage of improved market access through trade agreements. Industry groups say maintaining access to competitively priced raw materials will be important if Indian textile and apparel exporters are to convert these market opportunities into higher overseas shipments.
Recent export figures show mixed trends. Cotton yarn, fabrics, made-ups and handloom products recorded growth in shipments during July, while ready-made garment exports declined, highlighting continued pressure on parts of the textile sector.
If approved, an extension of the duty waiver would provide textile manufacturers with greater visibility on raw-material costs and supply, while potentially supporting India’s export competitiveness through the remainder of 2026.