Uncertainty Surrounds Extension of Duty-Free Cotton Imports

New Delhi. Given concerns over a potential decline in domestic production, there were expectations that the deadline for duty-free cotton imports would be extended by at least two months; however, the government has neither provided any indication nor reached a decision regarding this. The current period for duty-free cotton imports is set to expire on October 31. The industry is advocating for an extension until December 31, 2026.

Cotton production for the 2026-27 season is expected to fall due to a reduction in the area under cultivation and drought conditions in several states, including Maharashtra and Karnataka. Conversely, demand and consumption are projected to rise. During the 2025-26 marketing season (October–September), the country imported a significant volume of cotton.

Previously, cotton was subject to an 11 percent import duty, which was temporarily withdrawn in June–July. India primarily imports cotton from countries such as the United States, Brazil, and Australia. Although India is the world’s second-largest cotton producer—trailing only China—it still requires large-scale imports because domestic production consistently falls short of local demand and requirements. Interestingly, India also exports substantial quantities of cotton to various regions. If the deadline for duty-free imports is not extended, Indian textile products risk becoming uncompetitive in the international market, and domestic cotton prices may remain high.