New Delhi: The Central Government has exempted customs duty on cotton imports for a period of five months beginning June 1, 2026, in a move aimed at improving cotton availability and lowering input costs for the domestic textile industry.
The decision was announced through a notification issued by the Ministry of Finance on Saturday. Under the notification, imported cotton will be exempt from the entire Basic Customs Duty (BCD) as well as the Agriculture Infrastructure and Development Cess (AIDC).
The duty exemption will remain effective from June 1 to October 31, 2026.
According to the Finance Ministry, the measure has been introduced to augment the availability of cotton for the Indian textile sector and ensure a steady supply of raw material for manufacturers.
The ministry said the temporary exemption is expected to reduce production costs across the textile and apparel value chain, providing relief to both manufacturers and consumers while balancing the interests of domestic cotton growers.
“The temporary duty exemption is expected to reduce input costs across the textile and apparel sector, thereby providing targeted relief to manufacturers and consumers, while also keeping the interests of domestic farmers in mind,” the ministry said in a statement.
Officials said the move is likely to particularly benefit small and medium enterprises (SMEs), which depend heavily on stable cotton supplies and are often affected by fluctuations in raw material prices.
The ministry added that improved cotton availability could strengthen the overall performance and competitiveness of the domestic textile industry.
The notification was issued by the Department of Revenue under provisions of the Customs Act, 1962, and the Finance Act, 2021. It stated that the government considered the exemption necessary in the public interest.
India’s textile and apparel industry is one of the country’s largest manufacturing sectors and a major contributor to exports and employment. Industry stakeholders have frequently sought lower import duties during periods of constrained domestic supply and rising cotton prices.
The latest decision is expected to provide temporary relief to the sector and support production during the coming months.
