COMMODITY
Government extends duty-free import of cotton till December 31
Aug-28-2025

In order to support textile exporters facing steep 50% tariffs in the US, the government has extended duty-free import of cotton by three more months till December 31, 2025. Earlier, on August 18, the Finance Ministry had allowed duty exemption on cotton imports from August 19 till September 30. 

This includes exemption from both the 5% Basic Customs Duty (BCD) and the 5% Agriculture Infrastructure and Development Cess (AIDC), as well as a 10% Social Welfare Surcharge on both, which led to a cumulative 11% import duty on cotton. The move is expected to lower input costs across the textile value chain, encompassing yarn, fabric, garments, and made-ups and provide much-needed relief to manufacturers and consumers alike.

Effective August 27, the US has imposed a 50% duty on Indian goods, including textiles, gems and jewellery, and leather. The duty exemption would enhance the availability of raw cotton in the domestic market, stabilise cotton prices, and thereby reduce inflationary pressure on finished textile products. 

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