India extends cotton import duty exemption amid US tariff pressure
India has extended an import duty exemption on cotton by three months, until the end of December, a government order showed on Thursday (28 August), as New Delhi seeks to support the local garment industry that has been hit by hefty US tariffs.
The world's second-biggest cotton producer had earlier announced an exemption on cotton imports from an 11% duty until September-end and has now extended that to 31 December.
US President Donald Trump's doubling of tariffs on imports from India to as much as 50% on goods such as garments and jewellery took effect on Wednesday (27 August).
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The United States is India's largest market for garments and jewellery, worth nearly $22 billion in 2024. India has a 5.8% share in the US garment market, behind China, Vietnam and Bangladesh.
The duty exemption until year-end will let Indian textile companies import cheaper cotton, easing pressure amid a slowdown in US demand, Atul Ganatra, president of the Cotton Association of India, told Reuters.
"With the duty-free extension, imports could hit a record 4.2 million bales (1 Indian bale = 170kg) this year. Strong imports are likely to continue into the first quarter of next year as well," Ganatra said.
India's cotton marketing year runs from October to September.
