India announces customs duties waiver on cotton import for five months
India today announced a waiver of all customs duties on the import of cotton for five months this year, in a move aimed at boosting the availability of the raw material for the domestic textile industry.
The finance ministry issued a notification granting full exemption from basic customs duty as well as the Agriculture Infrastructure and Development Cess (AIDC) on imported cotton. The waiver will remain in force until October 30, 2026.
The exemption will remain in force from 1 June to 30 October this year, the Textile Ministry said in a statement.
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"The central government, on being satisfied that it is necessary in the public interest, hereby exempts cotton, when imported into India, from the whole of the duty of customs leviable thereon under the Customs Tariff Act and from the whole of the Agriculture Infrastructure and Development Cess," the Finance Ministry notification said.
The measure is expected to lower the cost of imported cotton and ensure a steady supply of the key raw material during the upcoming production season.
The textile ministry said that "keeping the interests of cotton farmers and the entire cotton value chain at the forefront, the government of India has adopted a proactive and balanced approach by temporarily exempting customs duties on cotton imports from 1 June to 30 October."
The measure, to be implemented during the cotton off-season, will ensure adequate availability of cotton for the textile industry, support MSMEs, moderate input costs and strengthen the competitiveness of Indian textiles while safeguarding farmers' interests and ensuring market stability, said the statement.
The measure has been calibrated keeping in view the interests of domestic cotton farmers as well.
The temporary duty exemption is anticipated to have a positive impact on the overall performance of the domestic textile sector, with small and medium enterprises standing to benefit in particular through improved availability of cotton in the market and reduced cost pressures on production.
The textile industry has been demanding exemption of import duty on cotton.
