In a move aimed at stabilizing domestic cotton prices and supporting the textile industry, the Government of India has exempted all customs duties on the import of raw cotton with effect from 19th August 2025 until 30th September 2025. This includes the removal of both the 5% Basic Customs Duty (BCD), the 5% Agriculture Infrastructure and Development Cess (AIDC), and a 10% Social Welfare Surcharge on both, cumulatively in an 11% import duty on cotton.

The decision, notified by the Central Board of Indirect Taxes and Customs (CBIC), is expected to lower input costs across the textile value chain encompassing yarn, fabric, garments, and made-ups and provide much needed relief to manufacturers and consumers alike.

The exemption responds to persistent demands from the textile industry, which has been urging the Government to eliminate import duties on cotton due to rising domestic prices and supply constraints. By temporarily waiving these duties, the Government aims to:

• Enhance the availability of raw cotton in the domestic market,
• Stabilize cotton prices, thereby reducing inflationary pressure on finished textile products,
• Support export competitiveness of Indian textile products by lowering production costs.
• Protect small and medium enterprises (SMEs) in the textile sector, which are more vulnerable to price fluctuations.

This measure is expected to have a salutary effect on domestic cotton prices and support the overall health of the textile and apparel sector, which is a significant contributor to employment and exports in India. Various textile associations welcome  the step taken by Government exempting all varieties of cotton from 11% import duty with effect from 19^thAugust 2025 and thanked the Hon’ble Prime Minister Shri Narendra Modiji and Hon’ble Union Minister of Textiles Shri Giriraj Singh for considering the long pending demand of the industry.

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MAM/SMP/NM