The Indian government has extended the duty-free import of cotton (HS 5201) by three months, now valid until December 31, 2025, to support textile exporters facing the impact of steep 50% U.S. tariffs.
Earlier, duty exemption on cotton imports had been allowed from August 19 to September 30, 2025. In a statement on August 28, the Finance Ministry said:
“In order to support exporters further, the Central government has decided to extend the import duty exemption on cotton from September 30, 2025 till December 31, 2025.”
The exemption covers the 5% Basic Customs Duty (BCD), 5% Agriculture Infrastructure and Development Cess (AIDC), and the 10% Social Welfare Surcharge, effectively eliminating the 11% cumulative import duty on cotton.
The move is expected to lower input costs across the textile value chain — including yarn, fabric, garments, and made-ups — benefiting manufacturers and consumers. It also aims to stabilize domestic cotton prices and reduce inflationary pressure on finished textile products.
The U.S. had imposed 50% tariffs on Indian goods, including textiles, gems and jewellery, and leather, effective August 27, 2025. The extended duty-free import is designed to enhance export competitiveness, lower production costs, and protect Small and Medium Enterprises (SMEs) in India’s textile sector.
