The Central Government has announced a temporary exemption on cotton imports, removing all customs-related levies for five months beginning June 1, 2026. The measure is intended to improve the availability of raw cotton for domestic textile manufacturers and help the industry manage input costs more effectively.
Relief Period
According to a notification issued by the Finance Ministry on May 30, 2026, imported cotton will be exempt from both the basic customs duty and the Agriculture Infrastructure and Development Cess (AIDC). The relief will remain effective until October 30, 2026.
Industry Impact
The latest decision offers significant relief to textile producers that rely on cotton as a key raw material. By suspending import duties, the government aims to make overseas cotton purchases more economical and ensure uninterrupted access to supplies during the upcoming production cycle.
The Finance Ministry’s notification stated: “The Central Government, on being satisfied that it is necessary in the public interest, hereby exempts cotton, when imported into India, from the whole of the duty of customs leviable thereon under the Customs Tariff Act and from the whole of the Agriculture Infrastructure and Development Cess”.
Expected Outcome
The exemption is expected to encourage higher imports, particularly at a time when industry stakeholders have been advocating for measures to improve raw material availability. This temporary relief follows previous industry demands to eliminate the 11 per cent customs duty on raw cotton imports amid rising prices and cost pressures on domestic manufacturers.
