India extends exemption of import duties on cotton in relief to textile sector hit by US tariffs

Govt on Thursday said that the exemption of import duties on cotton is being extended to “augment availability of cotton for the Indian textile sector”.

Updated on: Aug 28, 2025, 09:28:57 IST

By HT News Desk

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The central government has extended the exemption of import duty on cotton till December 31 in relief to the country’s garment industry, which has been hit hard by a 50 per cent tariff on goods going to the United States.

A worker feeds raw cotton into an opener machine at a processing facility in Amritsar (AFP)

The first exemption of import duties on cotton was announced in a government order late on August 18. India had exempted import duties on cotton until September 30.

A Press India Bureau (PIB) release on Thursday said that the exemption is being extended till December 31 to “augment availability of cotton for the Indian textile sector”.

“To augment availability of cotton for the Indian textile sector, the Central Government had temporarily exempted the import duty on cotton from 19th August 2025 till 30th September, 2025," the PIB release read.

"In order to support exporters further, the Central Government has decided to extend the import duty exemption on cotton (HS 5201) from 30th September 2025 till 31st December 2025,” it stated.

Impact of Trump tariffs on textile sector

The textile sector is among those exposed to be hit hard by the 50 per cent tariffs imposed on Indian imports by the Donald Trump-led administration of the US.

While 25 per cent tariffs were already in place, additional 25 per cent duties took effect from Wednesday, August 27. The additional tariffs, Donald Trump said, were imposed by the US on India for Russian oil purchase.

India exported over $2 billion (roughly ₹16,710 crore) in textiles and garments to the US in 2024, with $1 billion ( ₹8,765 crore) more in the first half of 2025.

Major apparel and textile exporters include Shahi Exports, Welspun, Indo Count Industries, Trident and Gokaldas Exports. The major clients include Walmart, Target, Costco and Gap.

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