Consideration to Reduce or Eliminate Import Duty on Cotton

29-Apr-2026 03:42 PM

New Delhi. The Central Government is considering a proposal to reduce or eliminate the customs duty currently applicable to cotton imports.

The prevailing unrest in the Middle East has not only disrupted cotton imports but has also driven up their costs. This is causing significant difficulties for the domestic textile industry. The industry would receive some relief if the customs duty were to be abolished.

It is noteworthy that while the Indian textile industry primarily utilizes domestically produced cotton, it is compelled to import long-staple and high-quality cotton from countries such as the USA, Egypt, Australia, and Brazil. India itself is a leading global producer of cotton.

A senior official from the Union Ministry of Textiles stated that consultations are currently underway with the Union Ministry of Agriculture and the Department of Revenue under the Ministry of Finance regarding the issue of reducing or eliminating the customs duty on cotton imports.

The Ministry of Textiles has also proposed the withdrawal of the 2.5 percent import duty currently applicable to rayon-grade wood pulp. This material is used in the manufacturing of Viscose Staple Fiber and filament yarn. It is imported from countries such as the USA, Canada, Brazil, and Indonesia.

Due to weak global demand and pricing pressures, India's exports of ready-made garments declined from $15.99 billion in the fiscal year 2024-25 to $15.77 billion in the fiscal year 2025-26. The Central Government had previously exempted cotton imports from duty for the period spanning August 19 to September 30, 2025, and subsequently extended this deadline to December 31, 2025. The import duty on cotton was reimposed effective January 1, 2026.