Cotton Import Duty Exemption Extended to 31 December 2026

Cotton brought into India will stay free of customs duty for two more months. The Government of India has extended the existing customs duty exemption on cotton imports up to 31 December 2026, a decision taken with the raw material needs of the domestic textile industry in mind.

How the extension was made

The change was notified by the Department of Revenue, Ministry of Finance, through Notification No. 35/2026-Customs dated 30 October 2026. The exemption that was in force was due to run out on 31 October 2026; the amendment carries it forward by two months, to the last day of December.

Why the government did it

Mills and garment units depend on a steady supply of fibre, and some varieties they need are not available in the quantity or quality they want at home. The stated purpose of the step is to put more cotton within reach of the domestic textile sector, to keep the fibre available at competitive prices, to back domestic manufacturing, to meet requirements for specialised cotton and to support value addition all along the textile and apparel chain.

Who gains

• Textile and apparel manufacturers, who get more room to plan their raw material purchases
• Micro, Small and Medium Enterprises, for whom input costs weigh heavily
• Indian textiles as a whole, whose competitiveness in home and foreign markets depends on input prices

The farmer's side of the balance

A duty-free window on imports is always a balancing act. Cheaper imported fibre helps the mills but can press down on what growers at home are paid. The government has said it remains conscious of the need to weigh the requirements of the textile industry against the interests of domestic cotton farmers, while keeping the long-term and sustainable growth of the whole cotton and textile value chain in view.

What follows

With the window open, the industry expects raw material to keep flowing without a break, which should improve operational flexibility and encourage greater value addition in the cotton-based textile and apparel sector. The Ministry of Textiles welcomed the decision of the Ministry of Finance and said it stays committed to a competitive, resilient and globally integrated textile sector, to value addition and employment generation, and to the long-term growth of the entire textile value chain.