The Government has extended the existing customs-duty exemption on cotton imports until 31 December 2026. The earlier exemption was due to expire on 31 October. The change was notified by the Department of Revenue through Notification No. 35/2026-Customs.
The Ministry of Textiles said the extension is aimed at improving cotton availability for domestic manufacturers, meeting specialised fibre requirements and easing input-cost pressure, particularly for smaller textile and apparel businesses. Reuters reported that firm domestic prices and production concerns had increased pressure on mills to seek more import flexibility.
The policy trade-off is between short-term relief for downstream textile users and the price environment faced by domestic cotton growers. The impact will depend on import volumes, global cotton prices, freight costs, the rupee and the size of the domestic crop.