In a decisive move to strengthen India’s textile and apparel industry, the Central Government has fully exempted customs duty and the Agriculture Infrastructure and Development Cess on cotton imports.
Effective from 1 June 2026 to 31 October 2026 (both days inclusive), all imports of cotton classified under tariff heading 5201 will attract zero basic customs duty and zero AIDC, as per a notification issued today by the Ministry of Finance.
The extraordinary gazette notification makes it crystal clear: this relief is granted “in the public interest” to augment domestic availability of this critical raw material.
The Indian textile sector, which employs over 45 million people and contributes nearly 2% to India’s GDP, has been grappling with volatile cotton prices and occasional supply tightness. By removing the entire duty burden for five crucial months — covering the peak festival and export season — the government is expected to:
- Significantly reduce input costs for spinning mills, fabric manufacturers, and garment exporters
- Provide immediate relief to thousands of small and medium enterprises (SMEs) that form the backbone of the industry
- Ensure smoother supply chains and better price stability for end consumers
- Maintain a careful balance by keeping domestic farmers’ interests protected through a time-bound window
The notification explicitly states that the exemption applies only to goods falling under heading 5201 (raw cotton) when imported into India. It will automatically lapse after 31 October 2026, giving the sector a defined breathing window.
