Consideration of Cotton Import Duty Cut: Relief for the Textile Industry
By yash chouhan 2026-04-29 11:39:15
Relief to textile industry: Consideration of reduction in cotton import duty
New Delhi: The central government is considering measures to provide relief to the domestic textile industry amid supply chain disruptions and rising raw material prices arising from the ongoing conflict in West Asia. In this sequence, a proposal to reduce or completely abolish customs duty on import of raw cotton is under discussion.
India's textile industry is mainly dependent on domestic cotton, but imports from the US, Egypt, Australia and to some extent Brazil to meet the need of long staple cotton. According to Bipin Menon, Trade Advisor to the Textiles Ministry, discussions are ongoing with the Agriculture Ministry and the Revenue Department on this issue.
The ministry also proposes to remove 2.5% import duty on rayon-grade wood pulp used in the production of viscose staple fiber (VSF) and filament yarn. This pulp is highly purified cellulose obtained from wood, which is an important raw material in the manufacture of man-made fibres. However, Menon clarified that the challenges faced in its supply are not directly related to the conflict in West Asia, so a decision on this can be taken later.
Currently, 5% customs duty is applicable on raw cotton, which was temporarily removed between August to December 2025. The government is now considering giving relief again in view of the current situation of the industry.
Due to weakness in global demand, India's readymade garment exports are likely to decline to $15.77 billion in fiscal year 2026. In such a situation, experts believe that reduction in duty will reduce the cost of raw materials, improve dividends and increase export competitiveness.
The move could prove crucial for the textile sector, which contributes 8–10% of the country's total exports, especially as the government aims to take exports to $100 billion by 2030.
