India Extends Cotton Import Duty Exemption to Boost Textile Sector

In a significant move aimed at buttressing the domestic textile industry, the Indian government has extended the exemption of import duty on cotton until December 31, 2025. This decision comes in the wake of a substantial 50 per cent tariff imposed by the US on Indian goods, effective as of August 27.

CITI Chairman Rakesh Mehra hailed the decision, emphasizing its critical timing. The extension promises to ensure sufficient cotton availability for local manufacturers, thereby safeguarding a key supply line amid heightened trade tensions. The Ministry of Finance highlighted this strategy as a crucial lifeline for Indian textile and apparel exporters.

The decision is also poised to enhance the industry's competitiveness by facilitating seamless access to cotton, a vital raw material. With the textile and apparel sector accounting for 28 per cent of exports to the US, maintaining this exemption is seen as essential to protecting both jobs and industry stability. India's long-term ambition to reach USD 100 billion in exports by 2030 remains a top concern.