Textile industry hails cotton duty waiver, expects export boost

Industry bodies said the temporary removal of cotton import duty will reduce input costs, improve competitiveness and support export growth across the textile value chain

The Indian textile and apparel industry on Saturday welcomed the government's decision to temporarily remove the 11 per cent import duty on cotton from June 1 to October 31, 2026, saying it will provide momentum to the MSME-dominated sector as it seeks to become more globally competitive amid global headwinds.

 

The Apparel Export Promotion Council (AEPC) said the measure is expected to augment the availability of cotton for the Indian textile and apparel sector and provide much-needed relief to the entire value chain.

 

A Sakthivel, chairman of the AEPC, said the temporary duty exemption is expected to reduce input costs across the textile and apparel sector, improve cotton availability, and enhance the competitiveness of Indian textile and apparel exports. The decision will particularly benefit small and medium enterprises (SMEs), which have been facing challenges due to the sharp increase in cotton and yarn prices.

 

He further noted that the removal of customs duty on cotton imports is the need of the hour and will help moderate domestic cotton prices. In this regard, he appealed to all spinning mills to pass on the benefits of lower cotton costs by rationalising yarn prices. This will help stabilise the entire textile value chain and enable garment exporters to secure and execute export orders more competitively in the coming months.

 

AEPC believes that this timely measure will strengthen India's position as a reliable global sourcing destination, improve export competitiveness, and contribute significantly to the growth of textile and apparel exports from the country.

 

The Confederation of Indian Textile Industry (CITI) said the import duty was acting as a hindrance to the Indian industry's growth. Along with other industry bodies, CITI had been advocating relief on the cotton import duty. The import duty on cotton was reinstated on January 1, 2026, after a brief hiatus from August to December 2025.

 

“Cotton imports are largely quality and specification-driven, catering to IT specialised requirements and back-to-back export orders. They do not displace domestic cotton," said Ashwin Chandran, chairman of CITI, in the statement. "Also, as a recent joint study by Gherzi and the International Cotton Advisory Committee noted, Indian industry requires a cotton policy environment that will allow us to compete with our Asian peers that have free access to international cotton without any import duty,” he pointed out.

 

The textile and apparel sector is India’s second-biggest employer and a major contributor to the GDP and exports. Textile and apparel exports declined 2.2 per cent in dollar terms year-on-year in FY26 to $35.79 billion.