India exempts all varieties of cotton from import duty

Coimbatore, 21st August 2025 – The Indian textile industry, a cornerstone of the nation’s economy with its predominantly cotton-based operations, has warmly welcomed the recent decision by the Ministry of Finance to exempt all varieties of cotton from import duty. This significant policy change, effective from 19th August 2025 to 30th September 2025, marks a pivotal moment for the industry, addressing long-standing challenges related to cotton shortages during the off-season period of April to September. The decision follows persistent advocacy by industry leaders and stakeholders, culminating in a series of high-level engagements with government officials.

The journey to this exemption began earlier this year when a delegation from the textile industry, accompanied by the Honorable Member of Legislative Assembly for Coimbatore Constituency, Smt. Vanathi Srinivasan, met with the Honorable Union Finance Minister, Smt. Nirmala Sitharaman, in Coimbatore in March 2025. During this meeting, the delegation submitted a detailed memorandum underscoring the critical need to waive the 11% import duty on cotton during the off-season. This measure, they argued, would create a win-win situation by ensuring a stable supply of cotton for the industry while protecting the interests of farmers. The Finance Minister responded positively, assuring the delegation that the proposal would be thoroughly evaluated in consultation with other ministries and stakeholders across the cotton value chain.

Following this interaction, the Ministry of Textiles organized a stakeholder meeting to deliberate on the issue, ultimately recommending the temporary suspension of the import duty for the April to September period. The industry’s case was further strengthened during the visit of the Honorable Union Minister of Agriculture and Farmers’ Welfare, Shri Shivraj Singh Chouhan, to Coimbatore on 11th July 2025. On this occasion, during the launch of the “Mission for Cotton Productivity,” the textile delegation reiterated the importance of duty-free cotton imports to address supply shortages and stabilize prices during the off-season.

The Ministry of Finance’s notification on 18th August 2025, granting the import duty exemption, was a direct response to these sustained efforts. The decision was met with widespread appreciation from the textile industry, which sees it as a vital step toward ensuring operational continuity and competitiveness in global markets. On 20th August 2025, a delegation led by Smt. Vanathi Srinivasan, along with Mr. Ravi Sam, Vice Chairman of The Cotton Textiles Export Promotion Council (TEXPROCIL), Mr. Dinesh Nolkha, Vice Chairman of the Confederation of Indian Textile Industry (CITI), and Mr. Venketrama Raja, Managing Director of Ramco and Secretary General of CITI, met Smt. Nirmala Sitharaman in Delhi to personally convey their gratitude for the government’s swift action

In a press release issued today, Mr. Ravi Sam expressed profound gratitude to the Honorable Prime Minister for addressing the industry’s long-standing request. He highlighted that the duty exemption would significantly alleviate the cotton shortage, enabling mills to operate more efficiently and maintain price parity in the domestic market. Mr. Sam also emphasized the strategic importance of this measure in bolstering India’s textile exports, particularly in light of the recently concluded Free Trade Agreement (FTA) with the United Kingdom. The duty exemption, he noted, would enhance the industry’s ability to expand its market share in the UK, a key export destination.

Moreover, Mr. Sam underscored the broader challenges facing the textile industry, particularly the impact of U.S. tariffs, which have posed significant hurdles to Indian exporters. He noted that during the recent meeting with the Finance Minister, she acknowledged these challenges and assured the delegation that the government is actively exploring measures to mitigate the crisis. Among the industry’s key demands are a two-year moratorium on the repayment of principal amounts, a 30% collateral-free loan under the Emergency Credit Line Guarantee Scheme (ECLGS) with a 5% interest subvention—similar to measures implemented during the COVID-19 period for both MSMEs and larger companies—and enhancements to the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, including an increase in rates and the removal of value caps. Additionally, the industry has called for an extension of the Rebate of State and Central Taxes and Levies (RoSCTL) scheme for an additional five years to provide long-term stability.

Mr. Sam expressed optimism that the government would soon implement these remedial measures to ensure the financial viability of the textile industry, which plays a critical role in sustaining millions of jobs, particularly for rural communities. He extended special appreciation to Smt. Vanathi Srinivasan for her unwavering support and relentless advocacy on behalf of the textile industry. Her efforts in facilitating dialogue with the government at the highest levels have been instrumental in securing this critical policy intervention.

The textile industry remains hopeful that continued collaboration with the government, bolstered by the leadership of figures like Smt. Vanathi Srinivasan, will pave the way for further measures to strengthen the sector’s resilience and global competitiveness. As Tamil Nadu’s textile hub in Coimbatore continues to thrive, this duty exemption marks a significant milestone in the industry’s journey toward sustainable growth and economic contribution.