Textile Sector Gets Major Boost with Extended Export Obligation Period, Duty Relief

The Indian textiles industry has welcomed a series of crucial policy interventions announced by the Directorate General of Foreign Trade (DGFT) and the Government of India, aimed at strengthening the competitiveness of man-made fibre (MMF) textiles and technical textiles in global markets.

Extension of Export Obligation Period

In a major relief to exporters, DGFT Notification No. 28 dated 28.08.2025 has extended the Export Obligation (EO) period under the Advance Authorisation Scheme for products subjected to mandatory Quality Control Orders (QCOs) issued by the Department of Chemicals & Petrochemicals (DCPC).

• The EO period has been increased from 6 months to 18 months, providing exporters more flexibility and certainty.

• Earlier, a similar extension had already been granted in respect of QCOs issued by the Ministry of Textiles.

Industry experts hailed this as a timely and much-needed measure, particularly for MMF and technical textile exporters who faced compliance-related hurdles.

Significance for the Textile Sector

The Advance Authorisation Scheme allows duty-free imports of critical inputs for use in physical exports. Importantly, such imports are exempted from the requirement of mandatory QCO compliance, ensuring seamless raw material availability for manufacturers.

With around 18% of all Advance Authorisations issued to the textile sector, the move holds strategic importance for India’s export performance. Industry leaders stated that the extension will:

• Enhance the ease of doing business,

• Lower compliance-related pressure on exporters,

• Improve the competitiveness of Indian textiles in international markets.

Cotton Import Duty Exemption

Adding further relief, the Government has exempted import duty on cotton (HS 5201) till 31st December 2025. This decision is expected to:

• Strengthen raw material availability for textile producers,

• Reduce input costs for fabric and apparel manufacturing,

• Support both domestic demand and export performance.

Industry Growth and Export Performance

The Indian textiles and technical textiles sector has been identified as a key growth driver under government initiatives such as:

• Production Linked Incentive (PLI) scheme,

• National Technical Textiles Mission (NTTM).

Exports under the MMF value chain were valued at USD 8.46 billion in 2024–25, including USD 401 million from MMF fibre exports. Technical textiles, widely used in healthcare, infrastructure, defence, and industrial applications, are projected to be among the fastest-growing segments in the coming decade.

Proactive Government Support

By extending EO periods, easing cotton import duties, and supporting textile manufacturing through PLI and NTTM, the Government has signalled strong commitment to:

• Reducing input cost pressures,

• Ensuring raw material security,

• Positioning India as a competitive global supplier of MMF and technical textiles.

Industry bodies described the interventions of DGFT and DCPC as forward-looking and proactive, aligned with India’s vision to transform into a global textile hub by 2030.