The textile sector has expressed gratitude to the current government for waiving the 11% customs duty and agricultural cess on imports of raw cotton, which will be in effect from June 1 to October 31, 2026.
On May 30, 2026, the Ministry of Finance released a notification that exempted manufacturers from the 5% Basic Customs Duty, 5% Agriculture Infrastructure and Development Cess (AIDC), and 10% Social Welfare cess on both, for a total of 11%. This was done to help manufacturers deal with serious supply issues and input cost constraints.
India’s textile industry is experiencing growing export opportunities but continues to face challenges due to cotton shortages and higher domestic cotton prices. The temporary duty exemption will enable access to competitively priced quality cotton from global markets, helping reduce costs and improve industry competitiveness.
Cotton makes up around 65% of yarn and 25–30% of the cost of manufacturing clothing and household textiles, therefore its price and availability are crucial factors in determining competitiveness. For exporters operating under long-term contracts and supply-nominated business arrangements, where changes in raw material prices can have a substantial influence on profitability and delivery commitments, stable and reasonably priced cotton supplies are especially crucial.
With domestic production of about 290 lakh bales falling short of the yearly requirement of 330–350 lakh bales, the textile sector is experiencing a 40–50 lakh bale cotton shortfall. Due to low productivity, India only provides 19% of the world’s cotton production even though it has 38% of the world’s cotton farming land.
Overall, the measure is anticipated to have a positive impact on the performance of the domestic textile industry, especially the small and medium enterprises, ensuring better availability of cotton in the market. The industry has welcomes temporary exemption of customs duty on cotton imports.
Dr. A. Sakthivel Chairman, AEPC
The Apparel Export Promotion Council (AEPC) has welcomed the decision of the Government of India to temporarily exempt all customs duties on cotton imports from 1st June 2026 to 30th October 2026. The measure is expected to augment the availability of cotton for the Indian textile and apparel sector and provide much-needed relief to the entire value chain.
Welcoming the announcement, Dr. A. Sakthivel, Chairman, AEPC, expressed his sincere gratitude to Hon’ble Prime Minister Shri.Narendra Modi ji, Hon’ble Finance Minister Smt. Nirmala Sitharaman, Hon’ble Union Minister of Commerce & Industry Shri Piyush Goyal, Hon’ble Union Minister of Agriculture & Farmers Welfare Shri Shivraj Singh Chouhan, Hon’ble Union Minister of Textiles Shri Giriraj Singh, for their timely intervention and support to the textile and apparel industry.
Dr. A. Sakthivel conveyed his special gratitude to Hon’ble Minister of State for Information & Broadcasting and Parliamentary Affairs, Shri L. Murugan, for his constant support, valuable coordination, and proactive efforts in addressing the concerns of the textile and apparel industry.
Dr. Sakthivel stated that the temporary duty exemption is expected to reduce input costs across the textile and apparel sector, improve cotton availability, and enhance the competitiveness of Indian textile and apparel exports. The decision will particularly benefit small and medium enterprises, which have been facing challenges due to the sharp increase in cotton and yarn prices.
He further noted that the removal of customs duty on cotton imports is the need of the hour and will help moderate domestic cotton prices. In this regard, he appealed to all spinning mills to pass on the benefits of lower cotton costs by rationalising yarn prices. This will help stabilise the entire textile value chain and enable garment exporters to secure and execute export orders more competitively in the coming months.
Dr. Sakthivel added that AEPC has been consistently representing the matter before the Hon’ble Ministers of Finance, Commerce & Industry, Agriculture, and Textiles through a series of meetings and submissions, highlighting the urgent need to remove customs duty on cotton imports. The Government’s decision is a positive outcome of these sustained efforts and demonstrates its commitment to supporting the growth of the textile and apparel sector.
AEPC believes that this timely measure will strengthen India’s position as a reliable global sourcing destination, improve export competitiveness, and contribute significantly to the growth of textile and apparel exports from the country.
Ashwin Chandran Chairman, CITI
The Confederation of Indian Textile Industry (CITI) welcomed the temporary removal of 11 percent import duty on cotton from June 1 to October 30 as a momentum for the Indian textile and apparel industry.
Amid the ongoing global volatility and uncertainty, the 11percent 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 dutyfree access to cotton. The cotton import duty is contributing to costs going up across the value chain and having a detrimental impact on scaling India’s textile and apparel exports.
India’s textile exports are dominated by cotton. India is aiming for USD 100 billion in textiles and apparel exports by 2030. “With this temporary relief in the cotton import duty, India’s textile and apparel exporters can better leverage opportunities that are emerging from the Free Trade Agreements (FTAs).
The demand-supply gap arising from steadily decreasing cotton production in India necessitated the need for imports to bridge the gap. “Cotton imports are largely quality and specification-driven, catering to specialised requirements and backto-back export orders. They do not displace domestic cotton.
A recent joint study by Gherzi and the International Cotton Advisory Committee noted that indian industry requires a cotton policy environment that will allow us to compete with our Asian peers that have free access to international cotton without any import duty.
Durai Palanisamy Chairman, SIMA
The predominantly cotton based textile industry has been pleading for the removal of 11% import duty on cotton, considering the 50-70 lakh bales shortage to be faced by the industry, owing to a crop size of 290 lakh bales as against the industry requirement of 330-340 lakh bales during the current cotton season.
The Government has considered the plea of the industry and given a temporary exemption for the period 1.06.2026 to 31.10.2026. Similar exemption was given during April to October 2022 and August to December 2025. This has given a sigh of relief to the entire cotton textile value chain that has been crippled due to abnormal increase of cotton price during the last 2 months. The cotton price has increased from Rs.54,500/- to Rs.71,000/- per candy of 355 kgs that has started softening in recent days.
Mr. Durai Palanisamy, Chairman, SIMA thanked the Hon’ble Prime Minister, Shri Narendra Modi, Hon’ble Union Minister of Finance Smt. Nirmala Sitharaman, Hon’ble Agriculture Minister Shri Shivraj Singh Chouhan, Hon’ble Union Minister of Commerce and Industries Shri Piyush Goyal and Hon’ble Union Minister of Textiles.
Shri Giriraj Singh for giving this much needed relief to the cotton textile industry. He has said that the relief would enable the exporters to meet their commitments and remain competitive to a certain extent.
SIMA Chairman has also profusely thanked the Hon’ble Chief Minister of Tamil Nadu Thiru C. Joseph Vijay for sending a D.O. Letter recommending removal of 11% import duty on cotton. Mr. Durai has hoped that the prices would soon match the international price and create a level playing field.
