Cotton Import Duty Exemption Extended Till December 31, 2026
Centre extends customs duty exemption on cotton imports till December 31, 2026. Here’s what the two-month relief means for MSMEs and textile exporters.
Key Highlights
- Exemption extended: The customs duty exemption on cotton imports, due to end on October 31, 2026, will now stay in place until December 31, 2026.
- Stated aim: The Ministry of Textiles says the move targets specialised cotton needs and supports value addition across the textile and apparel chain.
- MSME relief: The government expects it to ease input cost pressure and give manufacturers more flexibility in sourcing raw material.
- Exports are rising: Textile exports grew 16.1% year-on-year in August 2026 to Rs 29,776 crore, and the April–August total reached Rs 1.43 lakh crore.
- FTA tailwind: The India-EU FTA, whose negotiations concluded in January 2026, offers preferential access on 96.8% of tariff lines.
The Centre gave India’s textile industry another two months of relief on Saturday. It extended the customs duty exemption on cotton imports until December 31, 2026. The exemption was set to lapse on October 31, 2026, the same day the extension was announced.
That timing is worth noticing. Rather than let the exemption lapse and then bring it back, the government acted at the last moment. For manufacturers, that means import orders already in motion will not suddenly attract duty. A gap in the exemption could have thrown off contracts and pricing for mills that rely on imported cotton.
According to the Ministry of Textiles, the goal is “to address specialised cotton requirements and support value addition across the textile and apparel value chain.” Many Indian mills and garment makers buy imported cotton when they need fibre qualities that domestic supply does not always offer in the volumes they need. This is especially true for premium and export-oriented products.
