The Central government has extended the duty-free import of cotton by three months on Thursday, August 28, 2025. The cotton import duty break is extended until December 31, 2025, to support textile exporters facing steep 50% tariffs in the United States. Earlier, the Finance Ministry had allowed import duty exemption on cotton from August 19 till September 30.
In a statement on Thursday, the ministry said, “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. 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.”
Central Government extends import duty exemption on cotton till 31st December 2025 pic.twitter.com/xSyYjC4WLE
— ANI (@ANI) August 28, 2025
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This import duty includes exemption from the 5% Basic Customs Duty (BCD) and the 5% Agriculture Infrastructure and Development Cess (AIDC). Additionally, it also involves a 10% Social Welfare Surcharge on both.
The additional 25 per cent tariffs on India slapped by US President Donald Trump earlier this month are effective from August 27. The move has taken the cumulative tariff on Indian imports, including textiles, gems, leather, and jewellery, to 50%.
The duty exemption would facilitate the availability of raw cotton in the Indian market. Moreover, it would help in stabilising cotton prices and thereby lower inflationary pressure on finished textile goods.
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