Textile industry concerned as duty-free cotton imports end

02-Jan-2026 01:55 PM

Mumbai: The deadline for duty-free import of cotton expired on December 31, 2025, and no notification has yet been issued by the government to extend it further. This effectively means that an 11 percent customs duty on cotton imports has come back into force. With the end of duty-free imports, domestic cotton prices are likely to firm up somewhat. It may be recalled that cotton imports were made duty-free in August 2025, which had provided significant relief to cotton textile mills.

Meanwhile, in the United States—the largest buyer of Indian textile products—a 50 percent tariff has been imposed on such imports since the last week of August. This will make it extremely difficult for exporters to keep their product prices competitive in that market. According to the Tamil Nadu Spinning Mills Association, arrivals of cotton during the current marketing season are down by at least 6 million bales (each bale weighing 170 kg) compared with the previous season, and domestic cotton production is also likely to be less than 30 million bales.

Various textile industry bodies had been urging the central government to extend the duty-free cotton import window at least until March 2026, but these demands have been ignored. According to the Southern India Mills’ Association (SIMA), it appears that the era of duty-free cotton imports has now come to an end. This will adversely affect the competitiveness of Indian textile products in the global export market and squeeze margins for the industry and shippers. Exports to the United States, in particular, could be impacted.