Textile Industry Concerned as Duty-Free Cotton Imports End

03-Jan-2026 12:46 PM

New Delhi. The threat that prompted the central government to allow duty-free cotton imports in August 2025 has not yet subsided, but the government has nevertheless reversed its decision. The deadline for duty-free imports of cotton from abroad expired on December 31, 2025, and no official notification has been issued to extend it.

As a result, the 11 percent customs duty on cotton imports, which was in effect before August 2025, has been reinstated. With this, the path for duty-free imports has been closed.

The United States (USA) has been the most important market for Indian textile products, but a hefty 50 percent tariff has been imposed on their imports there. 

Moreover, the US is deliberately delaying the signing of a bilateral trade agreement with India, even though the agreement has already been finalized and both sides are satisfied with it.

Due to the high tariffs, the competitiveness of Indian textile products in the American market has decreased, and their export performance there has weakened.

Due to a reduction in the sowing area and crop damage from natural disasters, domestic cotton production in the current marketing season (October-September) of 2025-26 is estimated to fall below 300 lakh bales.

Although the price of cotton was still below the minimum support price due to duty-free imports, some improvement in prices is expected in the coming period.

The government agency, the Cotton Corporation of India (CCI), is purchasing a large quantity of cotton from farmers at the minimum support price, which may be sold later at a higher price.

The global market price of cotton has not yet increased significantly, but the cost of textile products made from imported cotton will naturally be higher due to the 11 percent customs duty. This will reduce the profit margins for the industry and exporters.