The Confederation of Indian Textile Industry (CITI) feels the removal of import duty on cotton will greatly benefit the Indian textile sector in its journey to become more efficient and competitive vis-à-vis its international peers.

"The removal of the import duty on cotton, though only for a brief period, signals the government’s strong commitment to help India’s textile sector become stronger and more globally competitive,” CITI Chairman Rakesh Mehra said. The removal of import duty on cotton has been a long-pending request of the Confederation of Indian Textile Industry.

“CITI would like to thank the Hon’ble Prime Minister, all other concerned authorities and different Ministries, especially the Finance, Textile, Agriculture and Commerce Ministries, for appreciating the concerns of the Indian textile sector and providing us the necessary support through this very progressive measure,” Mehra added.

India’s textile sector is dominated by cotton. The cotton value chain provides direct employment to nearly 35 million people and contributes around 80% to India’s total textile exports. India aims to more than double textile and apparel exports to $100 billion by 2030.

Through a notification issued on August 18, the Central Board of Indirect Taxes and Customs (CBIC) has removed the customs duty and agriculture infrastructure and development cess (AIDC) levied on import of all varieties of cotton (HSN 5201) with effect from August 19 till September 30, 2025.

This exemption also covers cotton in transit, as the taxable event for determining the rate of duty is the date of filing of the Bill of Entry, after the goods have entered the Indian port. In cases where the Bill of Entry has been filed in advance (as permitted by Customs for faster clearance prior to the arrival of goods), the same can be withdrawn and re-filed afresh at the earliest, that is, before the Out-of-Charge Order is issued for the imported cotton.

For the benefit of lakhs of cotton growing farmers, India’s FY26 Budget had announced a ‘Mission for Cotton Productivity’.

“This 5-year mission will facilitate significant improvements in productivity and sustainability of cotton farming, and promote extra-long staple cotton varieties. The best of science & technology support will be provided to farmers. Aligned with our integrated 5F vision for the textile sector, this will help in increasing incomes of the farmers, and ensure a steady supply of quality cotton for rejuvenating India’s traditional textile sector,” Union Finance Minister Smt. Nirmala Sitharaman had said in her Budget speech.