Cotton Import Relief: Centre Extends Duty Exemption Till December 31
The Indian government extends customs duty exemption on cotton imports until December 31, 2026, to lower costs for the textile industry.
In a strategic move to bolster the domestic textile and apparel sector, the Central Government has announced an extension of the customs duty exemption on cotton imports. The relief, which was originally slated to end on October 31, has now been pushed forward by two months, remaining in effect until December 31, 2026.
Boosting Raw Material Availability
The decision comes as part of an effort to ensure that the textile industry has a steady and affordable supply of raw materials. By extending the duty-free window, the government aims to ease the input cost pressures that often plague manufacturers, ultimately providing relief that could trickle down to the end consumers.
The Union Ministry of Finance formalized this extension through Notification No. 35/2026-Customs, dated October 30. This latest directive amends a previous notification issued on May 30, 2026, specifically replacing the October deadline with the new December 31, 2026 date.
Support for SMEs and Manufacturers
The move is expected to be a significant lifeline for small and medium enterprises (SMEs). These smaller players often lack the capital to absorb sudden price hikes in raw materials, and a consistent supply of cotton is critical for their daily operations.
Key objectives of this extension include:
- Reducing Input Costs: Lowering the financial burden on the textile and apparel value chain.
- Stabilizing Supply: Ensuring that garment manufacturers have a reliable flow of cotton to maintain production schedules.
- Procurement Management: Allowing manufacturers to manage their costs more effectively.
The Legal Framework
The notification was issued by the Department of Revenue under the Ministry of Finance via the Central Board of Indirect Taxes and Customs. The government stated that the extension was granted after being satisfied that such a move is "necessary in the public interest."
Legally, the amendment was made under Section 25(1) of the Customs Act, 1962, read in conjunction with Section 124 of the Finance Act, 2021. This amendment modifies Notification No. 19/2026-Customs, which was originally published in the Gazette of India.
Balancing Industry and Agriculture
While the move prioritizes the needs of the textile and apparel industry, the government is also aiming to strike a delicate balance. The extension is designed to support the manufacturing side of the economy while still considering the interests of domestic cotton farmers, ensuring that the domestic market remains stable for all stakeholders.