India Extends Cotton Import Duty Exemption Through December 31

The Union government has extended the customs-duty exemption on imported raw cotton for two more months, keeping the relief in place until December 31. The change prevents the existing exemption from expiring on October 31 and gives textile mills another short window to source fibre from abroad without the covered import duties.

The Ministry of Textiles said the Department of Revenue notified the extension through Customs Notification No. 35/2026, dated October 30. The announcement was published the next day. The government said it acted to meet the textile industry’s raw-material needs, improve cotton availability at competitive prices and support manufacturing, including value addition in garments and other textile products. It also said the decision must balance mill requirements with the interests of domestic cotton farmers.

This is a continuation of an existing policy, not a permanent change to India’s cotton tariff. The original duty-free window began on June 1 and was due to close at the end of October. The new notification adds two months. The government has not announced in this release what will happen after December 31, so mills and importers still face a defined end date rather than an open-ended guarantee.

The timing comes as India’s cotton season and import needs are being reassessed. The Cotton Association of India, an industry body, said its crop committee on October 28 lowered its final estimate of 2025–26 cotton pressing to 325.69 lakh 170-kilogram bales, from an earlier 339 lakh estimate. It put imports for the season at 71.60 lakh bales, compared with a previous estimate of 62 lakh, and consumption at 365 lakh bales. These are association estimates, not official government production totals, but they describe why mills may want access to imported fibre while the domestic crop is moving through the supply chain.

The association’s balance sheet included opening stocks of 55.59 lakh bales and projected closing stocks of 72.88 lakh bales after domestic use and exports. Those figures show why production and imports cannot be read in isolation: starting inventories, quality, location and the timing of deliveries also matter. Textile mills may need particular fibre grades or more predictable supply, while cotton farmers and ginners can be concerned that easier imports may compete with locally produced cotton.

For manufacturers, an exemption can reduce the landed cost of imported raw material, but the government’s announcement does not establish how much of that benefit will reach yarn, fabric, clothing or shoppers. Prices also depend on exchange rates, freight, global cotton prices, domestic procurement and processing costs. The release gives no quantified estimate of savings, import volume under the extension or effect on retail prices.

The immediate policy signal is therefore limited but clear: import access remains duty-exempt for two additional months while the government weighs industrial supply needs against farm interests. The extension may help mills plan near-term purchases, but it does not settle the longer-term question of how India should balance local cotton production with imports for a large textile sector.

Sources: Ministry of Textiles announcement · Cotton Association of India, October 2026 report