Centre Extends Customs Duty Exemption on Cotton Imports Until December 31, 2026
New Delhi: Providing relief to the domestic textile and apparel industry, the Central Government has extended the customs duty exemption on cotton imports by two months. The exemption will now remain in effect until December 31, 2026; the previous deadline was October 31, 2026. The Ministry of Finance announced this extension via notification number 35/2026-Customs, issued on October 30.
The government’s decision aims to ensure the availability of raw materials for the textile and apparel sector and to help reduce production costs for manufacturers. This move is expected to provide relief to cotton-dependent textile mills, garment manufacturers, and, in particular, small and medium-sized enterprises (SMEs).
Extension of the Exemption Period for Cotton Imports
The Department of Revenue under the Ministry of Finance, through the Central Board of Indirect Taxes and Customs (CBIC), has issued this amendment. It modifies notification number 19/2026-Customs, which was issued on May 30, 2026. The date of October 31, 2026, as specified in the earlier notification, has now been revised to December 31, 2026.
This amendment has been made under Section 25(1) of the Customs Act, 1962, and Section 124 of the Finance Act, 2021. In the notification, the government stated that this extension was deemed necessary in the public interest.
Relief for the Textile and Apparel Industry
The continuation of the customs duty exemption is expected to provide relief to domestic textile and apparel manufacturers when purchasing imported cotton. This should assist the industry in maintaining the availability of raw materials and keeping production costs under control. Small and medium-sized enterprises (SMEs), in particular, are likely to benefit from this decision, as their production activities depend on the prices and availability of raw materials. Furthermore, the entire value chain of the textile and apparel sector could also gain from this extension.
Potential impact on the domestic cotton market
The extension of the duty exemption on cotton imports is expected to ensure the continued availability of imported cotton in the domestic market. This could help meet the raw material requirements of the textile industry. However, the actual impact on the demand for and prices of domestic cotton will depend on the volume of imports, market demand, and domestic supply.
The government's move aims to strike a balance between the raw material needs of the textile industry and the interests of domestic cotton farmers. With this extension, the textile industry will continue to benefit from the customs duty exemption on cotton imports until December 31, 2026.
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