Govt Extends Cotton Import Duty Exemption Till Dec 31 Amid US Tariff Pressure

The government has extended the exemption on cotton import duty until December 31, 2025, just a day after the US imposed steep 50% tariffs on Indian exports. The Finance Ministry said the move aims to ensure adequate cotton supply for the textile industry and allow manufacturers to place long-term import orders.

Initially, the duty exemption was valid only until September 30, but exporters argued that the short window offered little relief beyond shipments already in transit. Cotton imports have been a longstanding demand of the industry, though the government has typically maintained an 11% duty to protect small farmers.

The timing of the exemption, however, may impact cotton growers, as plucking season begins in October and continues until March. Analysts suggest the decision is also a signal to Washington that India may be open to cotton trade negotiations.

Industry bodies, including AEPC and CITI, have raised concerns over the impact of US tariffs on exports and warned of possible job losses and order cancellations. Meanwhile, rivals like Vietnam and Bangladesh are witnessing sharp growth in US textile imports, while India’s export momentum has slowed.

India’s textile sector, heavily dependent on cotton, employs nearly 35 million people and contributes around 80% of the country’s textile exports. The government has set a target to double exports to $100 billion by 2030.