New Delhi: Textiles ministry Thursday said that the extension of the import duty exemption on cotton until December 31, 2025 is expected to stabilise the input costs across the textile value chain including yarn, fabric, garments, and made-ups, providing relief to manufacturers and consumers alike.
“This strategic intervention ensures that the textile sector remains globally competitive while safeguarding the interests of domestic cotton farmers. Most imports cater to specialized industrial requirements or brand-linked export contracts and do not replace domestic cotton,” the ministry said in a statement.
The imports were earlier taxed at 11%.
With 95% of domestic cotton consumed by the textile industry, the duty exemption is expected to indirectly benefit farmers as global competitiveness enables mills to pay better prices to cotton farmers, according to the statement.
“Consistent raw material supply expected to spur the production of higher-value fabrics and garments, supporting the government’s ‘ Make in India’ and domestic manufacturing goals,” it said.
The textile-apparel value chain employs over 45 million people, and stable cotton supply is crucial to prevent job losses and encourage industry growth.
As per the statement, imported cotton often caters to specialized industrial requirements and does not substitute domestic cotton.
“Most imports occur during lean periods or when domestic stocks are insufficient, which minimizes competition with peak domestic procurement periods,” it said. The government monitors cotton prices closely and retains the flexibility to impose safeguards as and when required.
Cotton textile exports accounted for approximately 33% of India’s total textile and apparel exports during April–October 2024–25, valued at $7.08 billion, making it the second-largest contributor after readymade garments.
“This strategic intervention ensures that the textile sector remains globally competitive while safeguarding the interests of domestic cotton farmers. Most imports cater to specialized industrial requirements or brand-linked export contracts and do not replace domestic cotton,” the ministry said in a statement.
The imports were earlier taxed at 11%.
With 95% of domestic cotton consumed by the textile industry, the duty exemption is expected to indirectly benefit farmers as global competitiveness enables mills to pay better prices to cotton farmers, according to the statement.
“Consistent raw material supply expected to spur the production of higher-value fabrics and garments, supporting the government’s ‘ Make in India’ and domestic manufacturing goals,” it said.
The textile-apparel value chain employs over 45 million people, and stable cotton supply is crucial to prevent job losses and encourage industry growth.
As per the statement, imported cotton often caters to specialized industrial requirements and does not substitute domestic cotton.
“Most imports occur during lean periods or when domestic stocks are insufficient, which minimizes competition with peak domestic procurement periods,” it said. The government monitors cotton prices closely and retains the flexibility to impose safeguards as and when required.
Cotton textile exports accounted for approximately 33% of India’s total textile and apparel exports during April–October 2024–25, valued at $7.08 billion, making it the second-largest contributor after readymade garments.
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