In a bid to support India’s textile industry and cushion exporters against high U.S. tariffs, the Central Government on Thursday announced an extension of import duty exemption on cotton till December 31, 2025.
According to a Ministry of Finance release, the move aims to ensure adequate cotton availability for the domestic textile sector. The exemption, which was earlier applicable from August 19 to September 30, 2025, has now been extended by another three months.
“To augment availability of cotton for the Indian textile sector, the Central Government had temporarily exempted import duty on cotton from 19th August 2025 till 30th September 2025. In order to support exporters further, it has now been extended till 31st December 2025,” the statement read.
The U.S. remains India’s biggest textile market, accounting for nearly 28% of exports, valued at almost USD 11 billion in 2024-25. However, Indian exporters face steep 50% tariff rates, compared to Vietnam and Bangladesh, where duties are around 20%.
Earlier this month, textile bodies lauded the waiver of customs duty on cotton imports until September 30, saying it gave immediate relief to manufacturers facing supply uncertainties.
Chandrima Chatterjee, Secretary General of CITI, said the extension reflects the government’s responsiveness to repeated appeals from industry associations. “It’s a great move for the Indian industry. If it also sends a positive signal in ongoing trade negotiations, then it’s a win-win. But the primary driver has been the concerns raised consistently by the sector,” she noted.
With the exemption now valid till December 31, 2025, the industry has secured crucial relief while awaiting progress on a potential India-U.S. trade deal.