India Expected to Extend Duty-Free Cotton Imports Through December to Ease Shortages
India plans to extend duty-free cotton imports through December to lower domestic prices, ease supply tightness, and support textile mills.
POLICY WIRE — New Delhi, India — India is poised to prolong its 11% customs duty exemption on cotton imports until the end of December, according to three government and industry sources. The regulatory extension aims to alleviate domestic supply shortages, lower local prices, and cut operating costs for the nation’s struggling textile mills.
Domestic cotton prices have stayed firm amid lower crop prospects, with domestic output estimated below 29 million bales in 2026-27 against a demand that exceeds 34 million bales. Prices have climbed above ?9,000 per 100 kg, pushing past the government-set floor price of ?8,717 for the new season.
Trade ministry figures highlight that India’s cotton imports surged 63% year-on-year to $1.1 billion during the first six months of the fiscal year starting in April. As the world’s largest cotton producer after China, the country originally waived the 11% import tax for a five-month period running from June 1 through October 31.
The ongoing policy continuation is also designed to cushion the textile sector against external pressures, including a 50% tariff imposed by the United States on Indian goods. By securing stable access to foreign raw materials, the decision is expected to lift shipments from major suppliers like the U.S., Brazil, and Australia.
The Central Board of Indirect Taxes and Customs formally notified the extension through December 31, 2025. This move supports the textile industry—India’s second-largest employment provider—during the festive season by stabilizing input costs across the manufacturing pipeline.
Reporting by Policy-Wire (PW)
