India Waives Cotton Import Duty Till Sept 30
India has scrapped import duties on cotton between August 19 and September 30, offering short-term relief to its textile and apparel sector as it battles rising global trade pressures.
The government order, issued late Monday, fulfills a long-standing demand from industry groups who argued that duty-free cotton imports would make Indian manufacturers more competitive. Until now, cotton imports attracted an 11% duty.
The move comes at a critical time, as Indian garment exporters face a steep 50% tariff on shipments to the United State, comprising a 25% existing levy and another 25% surcharge due later this month. Washington imposed the additional duty as a penalty for India’s continued purchases of Russian oil. By comparison, US tariffs stand at 20% for Bangladesh and Vietnam, and 30% for China, putting Indian exporters at a distinct disadvantage.
Industry bodies, including the Confederation of Indian Textile Industry (CITI), had pressed the government to ease import costs. CITI Secretary General Chandrima Chatterjee said, “CITI has long been requesting that the import duty on cotton be removed to help domestic cotton prices align with international prices. We, therefore, greatly welcome this measure taken by the authorities even though the relief is only available temporarily.”
India’s garment sector has already been grappling with a labour shortage and limited production capacity. Exporters have also warned that prolonged trade headwinds could push manufacturing abroad, posing risks to the government’s flagship “Make in India” program.
The duty suspension comes as New Delhi eyes an ambitious target of US$ 100 billion in textile exports by 2030. Until recently, India was gaining traction as a strong sourcing alternative for American buyers amid political unrest in Bangladesh and efforts to diversify away from China. But the sharp rise in US tariffs threatens to slow that momentum.
