Cotton Duty Cut To Boost Textile Competitiveness: CITI
The Confederation of Indian Textile Industry (CITI) has welcomed the government’s decision to remove import duty on cotton, calling it a long-pending reform that will enhance the global competitiveness of India’s textile sector.
“The removal of the import duty on cotton, though only for a brief period, signals the government’s strong commitment to strengthen the Indian textile industry,” said CITI Chairman Rakesh Mehra. He thanked the Prime Minister and the Finance, Textile, Agriculture, and Commerce Ministries for addressing industry concerns through what he termed a “very progressive measure.”
Cotton is the backbone of India’s textile sector, employing nearly 35 million people and contributing about 80% to total textile exports. India is aiming to more than double its textile and apparel exports to $100 billion by 2030.
Through a notification issued on August 18, the Central Board of Indirect Taxes and Customs (CBIC) exempted all varieties of cotton (HSN 5201) from customs duty and the Agriculture Infrastructure and Development Cess (AIDC) from August 19 to September 30, 2025. The exemption also applies to cotton already in transit, with flexibility provided to refile Bills of Entry for faster clearance.
The move aligns with the government’s broader focus on cotton development. The Union Budget for FY26 had announced a five-year “Mission for Cotton Productivity,” aimed at boosting yields, promoting extra-long staple cotton, and ensuring steady supply through science and technology support. Finance Minister Nirmala Sitharaman said the initiative would not only increase farmer incomes but also strengthen the textile value chain under the government’s integrated 5F (Farm to Fibre to Factory to Fashion to Foreign) vision.
