The Government has extended the deadline for customs duty exemptions on cotton imports until December 31, 2026. The previous deadline of October 31 has been extended to improve cotton availability in the textile sector of the country.
The revised deadline would provide more time to the industries to deal with input costs and ensure the production of textiles and apparel at reduced costs. This would also bring relief to consumers and manufacturers, while keeping in view the needs of domestic farmers.
As per the government’s data, cotton production in the country has come down from 352.48 lakh bales in 2020-21 to 290.91 lakh bales (Provisional) in 2025-26. Whereas, estimates cited by Reuters predict the demand for cotton to exceed 340 lakh bales. This misalignment between the demand and actual production of the fibre in the country would burden manufacturers and consumers alike.
The waiver of customs duty until the end of December would help deal with the issue of a probable scarcity of cotton and keep prices from rising. The domestic textile industry, which primarily consists of small and medium enterprises, would also benefit from the better availability of cotton.
The Finance Ministry had previously waived the 11% import duty on cotton from June 1 to October 31.
The move would not only reduce raw material costs but also support domestic cotton prices by encouraging imports from major suppliers such as the USA, Brazil, and Australia.
Domestic cotton costs over Rs 9,000 per quintal, which is more than the minimum support price set by the government at Rs 8,717 per quintal. This adds another layer of pressure on the industries if imported cotton is subject to customs duty.
Cotton imports in India, which have already risen 63 per cent year-on-year during April–September 2026, may further gain momentum with the decision to keep import duty at zero.
The implementation of import duty functions on a broader level and does not merely affect production costs. When import duty is imposed, domestic manufacturers suffer due to increased costs. Also, their competitiveness against regional exporters such as Bangladesh and Vietnam is affected. Competition in the market helps keep prices regulated and ensures product supply.
Thus, the government’s decision to extend the deadline for duty-free cotton imports would be crucial for domestic manufacturers, small and medium industries, and consumers. To keep the flow unhindered and foster healthy global competitiveness, the move is expected to bring a sigh of relief.
