Cotton imports: India extends duty exemption to 31 Dec 2026

The Ministry of Finance has extended India’s customs duty exemption on cotton imports by two months, moving the deadline from 31 October to 31 December 2026, DD News reported. The extension gives textile and apparel manufacturers a longer period of duty relief intended to improve raw cotton availability and ease production costs.

According to DD News, the ministry issued Notification No. 35/2026-Customs, dated 30 October 2026, to amend the exemption announced on 30 May 2026. The reported change replaces the earlier expiry date rather than introducing a separate exemption.

DD News reported that the government described the decision as being in the public interest. The broadcaster said the measure aims to support the textile and apparel supply chain, including small and medium enterprises that use cotton in their manufacturing operations.

The immediate development is an extension of the exemption period. Lower procurement costs, steadier raw material supplies and possible benefits for consumers are the anticipated effects described in DD News’ report, not measured outcomes of the extension.

How the exemption period has changed

The October amendment changes Notification No. 19/2026-Customs, according to DD News. The broadcaster identified the Department of Revenue under the Ministry of Finance, through the Central Board of Indirect Taxes and Customs, as the issuing authority.

Hindustan Times, in its reporting on the earlier exemption, quoted the ministry’s order as stating that it would take effect on 1 June 2026 and remain in force up to and including 31 October 2026. That was the five-month window now being extended.

The earlier decision followed a return of the import duty at the start of the year. Hindustan Times reported that the duty had been reinstated on 1 January 2026 after a temporary exemption from August to December 2025.

The sequence distinguishes the latest action from the initial removal of the duty: the June measure provided the temporary relief, while the October amendment extends its end date. DD News described the latest change as a two-month continuation of that arrangement.

DD News reported that the amendment invokes Section 25(1) of the Customs Act, 1962. India Code’s published arrangement of the Act identifies Section 25 as the provision dealing with the power to grant exemption from duty. In plain terms, the reported measure concerns relief from customs charges on cotton imports.

Manufacturers’ case for duty relief

The textile industry’s argument for the earlier exemption centred on the cost of imported cotton and competition in export markets.

Hindustan Times reported that the Confederation of Indian Textile Industry, or CITI, welcomed the temporary removal of an 11 per cent import duty. Its chairman, Ashwin Chandran, said the duty had made it harder for Indian textile and apparel businesses to compete internationally.

“Amid the ongoing global volatility and uncertainty, the 11% import duty on cotton was acting as a major hindrance to the Indian textile and apparel sector in raising its global competitiveness since our major Asian competitors already have duty-free access to cotton,” Chandran said, according to Hindustan Times.

Chandran also said the duty increased costs across the production chain and impeded the expansion of textile and apparel exports, the newspaper reported. Those comments concerned the earlier exemption; they were not a response to the October extension.

The industry’s position was therefore broader than the tax paid at importation. According to Hindustan Times’ account of CITI’s remarks, the organisation saw cotton costs as affecting competitiveness across the businesses that turn the raw material into textile and apparel products.

The newspaper placed those concerns against weaker export performance. It reported that India’s total textile and apparel exports fell 2.2 per cent to $35.79 billion in 2025-26.

Within that total, readymade garment exports declined 1.4 per cent to $15.8 billion, while exports of cotton yarn, fabrics, made-ups and handloom products fell about 4 per cent to $11.58 billion, according to Hindustan Times. These figures describe the sector’s performance before the latest extension, not its response to the additional duty-free period.

Government’s stated balance of interests

When the earlier exemption was announced, a government spokesperson described it as temporary relief intended to increase cotton availability for the Indian textile sector, Hindustan Times reported.

The spokesperson said the measure was expected to reduce input costs and support manufacturers and consumers while keeping domestic farmers’ interests in mind, according to the newspaper. That statement set out the government’s intended balance between the needs of cotton users and producers.

DD News similarly described possible consumer relief from the extension as indirect, through lower production costs. Its report did not quantify expected savings for manufacturers or any reduction in retail prices. The reported notification changes the duration of the exemption; the extent to which that relief reaches consumers remains unquantified.