CITI: Cotton Duty Extension A Lifeline For Textile Industry
The Confederation of Indian Textile Industry (CITI) has welcomed the government’s decision to extend the exemption of import duty on cotton until December 31, 2025, calling it a crucial support measure for the country’s textile and apparel sector, which is reeling under the impact of a steep 50% tariff imposed by the US from August 27.
The United States remains India’s single largest market for textiles and apparel, accounting for nearly 28% of total exports. The extension, announced on August 28, follows the earlier temporary exemption (Aug 19 – Sept 30, 2025) and now ensures duty-free cotton imports until year-end.
CITI Chairman Rakesh Mehra expressed gratitude to the Prime Minister and key ministries, including Finance, Textile, Agriculture, and Commerce, for what he termed a “lifeline at a critical juncture.” He added, “The balanced approach will benefit all stakeholders in the textile value chain, helping exporters remain competitive at a time when the industry faces one of its gravest crises. It will also safeguard jobs and ensure factories can continue operating.”
The textile and apparel sector is among India’s largest job creators, providing direct and indirect employment to over 100 million people. Within this, the cotton value chain alone employs nearly 35 million and dominates India’s export basket. India has set an ambitious target of doubling textile and apparel exports to $100 billion by 2030.
The removal of import duties has long been a key demand from the industry. A CITI analysis shows that from 2015/16 to 2024/25, cotton imports met only 5.8% of total demand, with little correlation between duty imposition and import volumes. However, tariff removal helps stabilize domestic prices and ensures reliable raw material availability.
Meanwhile, the government is also working on strengthening the cotton ecosystem at the farm level. In the FY26 Budget, Finance Minister Nirmala Sitharaman announced a “Mission for Cotton Productivity”, a five-year program aimed at boosting productivity, promoting extra-long staple varieties, and supporting farmers with advanced technology. This initiative, aligned with the government’s “5F Vision” for textiles (Farm to Fibre to Factory to Fashion to Foreign), is expected to raise farmer incomes while securing steady cotton supplies for the industry.
