The Indian government removed the 11% import duty on cotton starting June 1, 2026, through Oct. 31, 2026 [1, 2].
This temporary waiver aims to stabilize the supply of raw materials for the country's textile industry, which is largely composed of micro, small, and medium enterprises (MSMEs). By lowering the cost of inputs, the Ministry of Commerce & Industry intends to make Indian textiles more competitive in the global market [1, 3].
The decision follows a period of volatility in the sector. Raw cotton imports saw a 54.6% increase to $1.86 billion in fiscal year 2026 [4]. Despite this increase in raw material availability, Indian textile exports declined by 2.2% during the same period, falling to $35.79 billion [4].
Financial markets responded positively to the announcement. Shares of textile companies, including Gokaldas Exports and Indo Count, rose by up to 11% [1].
"The removal of the 11% import duty on cotton will improve the global competitiveness of India's textile sector," Manisha Gupta said to CNBC TV18 [5].
Industry representatives said the waiver is expected to reduce input costs and boost exports [6]. A CITI analyst said the move will support MSMEs and enhance the availability of raw materials for the sector [3].
The exemption applies to all ports of entry across India for the five-month duration [2].
“The removal of the 11% import duty on cotton will improve the global competitiveness of India's textile sector.”
The Indian government is using a targeted fiscal lever to counteract a decline in textile exports. By eliminating the 11% duty, the state is prioritizing the immediate survival and competitiveness of MSMEs over customs revenue, attempting to reverse the 2.2% dip in exports by lowering the cost of production for manufacturers.
