Cotton Import Duty Exemption Extended Till December 2025

On 28 August 2025, the Central Government announced an extension of the import duty exemption on cotton (HS Code 5201) until 31 December 2025. Initially introduced from 19 August to 30 September 2025, this policy move aims to ensure uninterrupted availability of cotton for the Indian textile and garment sector, while also supporting the competitiveness of exporters amid rising global cotton prices and domestic supply constraints.

Background and Initial Exemption

The government had temporarily removed the import duty on cotton beginning 19 August 2025, with the initial deadline set for 30 September 2025. This was in response to,

• Domestic supply shortages
• Fluctuating cotton prices
• Export demands from Indian textile manufacturers

With the textile sector being one of the largest employment generators in India, any volatility in raw material availability can have cascading effects on production, exports, and job stability.

Reason for Extension

The latest extension of the duty-free import window until the end of 2025 is designed to further ease pressure on cotton availability during the upcoming festive and export seasons. This will help,

• Stabilize domestic cotton prices
• Support textile manufacturers and exporters
• Prevent disruptions in garment production chains

It reflects the government’s continued commitment to maintaining supply chain stability and boosting global competitiveness for Indian cotton-based products.

Policy Implications

This exemption is particularly important for India’s cotton textile value chain, which includes,

• Spinning mills
• Garment manufacturers
• Exporters targeting global markets like the US, EU, and Middle East

The move also mitigates the impact of climate-related crop yield fluctuations and global market volatility, ensuring that manufacturers have access to sufficient raw materials at affordable rates.