New Delhi: The Centre on Saturday exempted cotton imports from customs duties and the agriculture infrastructure and development cess for five months beginning 1 June. The exemption comes at the foot of hightened tensions at the Middle East. The move aims to ease raw material costs for domestic textile and apparel manufacturers supply hampered by the blocking of the Strait of Hormuz.
“To augment the availability of cotton for the Indian textile sector, the Central Government has temporarily exempted all customs duties on import of cotton from June 1, 2026, till October 31, 2026,” the Ministry said after the Central Board of Indirect Taxes and Customs (CBIC) issued a notification. “The temporary duty exemption is expected to reduce input costs across the textile and apparel sector, thereby providing a targeted relief to manufacturers and consumers, while also keeping the interests of domestic farmers in mind,” the Ministry added.
At present raw cotton imports attract an effective duty of 10.5% inclusive of 5% basic customs duty, 5% agriculture infrastructure and development cess, and 0.5% social welfare surcharge on the customs duty component.
According to Directorate General of Foreign Trade (DGFT) data, India’s raw cotton imports surged 54.6% year-on-year to $1.86 billion in FY26, while exports fell 33.9% to $436.35 million.
The textil and apparel industry of India is the highest grossing exporters, accounting for around 8-10% of the country’s total merchandise exports.
Amid weak global demand and pricing pressures, India’s exports of readymade garments fell to $15.81 billion in FY26 from $16.01 billion in FY25, registering a marginal decline of 1.2%, according to government data.
Year on Year, an overall decline by 2.2% to $35.7 billion in FY26 from $36.6 billion in FY25 reflecting weakness in overseas markets. According to official statement, total textile exports, including handicrafts, rose 2.1% to ₹3.16 lakh crore in FY26 from ₹3.10 lakh crore in the previous fiscal.
The duty was earlier removed in 2025 between August and December after the US updated its tariffs. The industry, which is the country’s second-largest employment provider, requires stable access to high-quality cotton. In order to seek easier access to imported cotton, bridge supply gaps and moderate raw material costs, the government has announced an import duty exemption. Cotton is the principal raw material for India’s spinning and textile sector, which contributes significantly to exports and employment.
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