IndiaPosted at: Oct 31 2026 10:48AM


Centre extends duty-free cotton imports till Dec 31 to ease textile industry costs

New Delhi, Oct 31 (UNI) The Centre has extended the exemption from customs duty and Agriculture Infrastructure and Development Cess (AIDC) on cotton imports by two months until December 31, allowing textile manufacturers to continue importing raw cotton without paying the specified levies.
The decision, notified by the Ministry of Finance on October 30, comes a day before the existing exemption was scheduled to expire on October 31 and is expected to improve cotton availability and help textile mills manage raw material costs.
According to Notification No. 35/2026-Customs, issued under G.S.R. 960(E), the government has amended its earlier notification dated May 30, 2026, by replacing the October 31 expiry date with December 31.
The amendment substitutes "31st day of October, 2026" with "31st day of December, 2026" in paragraph 2 of Notification No. 19/2026-Customs.
The original notification, which took effect on June 1, 2026, granted an exemption from the entire customs duty leviable under the First Schedule to the Customs Tariff Act, 1975, and the entire AIDC leviable under the Finance Act, 2021, on imports of cotton classified under tariff heading 5201.
The heading covers cotton that has not been carded or combed. The extension does not introduce a new product category or alter the scope of the existing exemption.
The Finance Ministry had said in May that the temporary exemption was intended to augment cotton availability for the domestic textile industry and reduce input costs across the textile and apparel sector.
"The temporary duty exemption is expected to reduce input costs across the textile and apparel sector," the ministry said while announcing the original measure.
It had also said that improved cotton availability was expected to benefit textile manufacturers, particularly small and medium enterprises, while taking into account the interests of domestic farmers.
The latest decision extends that concession through the end of December, providing textile mills with an additional two-month period to source imported cotton under the existing duty exemption.
Cotton is a key raw material for India's spinning, weaving and textile manufacturing industries, and changes in its availability and procurement costs can affect production expenses across the sector.
The extension may help manufacturers manage input costs, although its eventual effect on domestic cotton prices and textile production will depend on market conditions and the volume of imports.
The notification was issued by the Department of Revenue under Section 25(1) of the Customs Act, 1962, read with Section 124 of the Finance Act, 2021.
The government stated that it was satisfied the amendment was "necessary in the public interest".
The October 30 notification, signed by Under Secretary Dheeraj Sharma, makes no other changes to the original exemption.
The concession will now remain valid until December 31, inclusive, unless the government issues a further amendment.
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