Textile Stocks Rally Sharply Following Temporary Exemption on Cotton Import Duty
Shares of textile and apparel companies witnessed a significant surge during early trading on Monday. This rally followed the Central Government's announcement of a temporary exemption on customs duty levied on cotton imports. The move aims to enhance the availability of raw materials and provide relief to the domestic textile industry.
In a notification issued on Saturday, the Ministry of Finance stated that all customs duties applicable to cotton imports have been waived for the period spanning from June 1, 2026, to October 30, 2026. Previously, an effective duty of 11% was applicable to imported cotton. Under the new regime, cotton imports will remain completely duty-free for the next five months.
According to the government, this decision was taken at a time when cotton prices in the domestic market remain at elevated levels. The removal of import duties is expected to boost cotton availability and provide relief to textile and apparel manufacturers who rely on imported cotton. This is likely to result in reduced production costs and improved operating margins for these entities.
Investors welcomed the government's announcement positively, leading to strong buying activity in the shares of several textile companies. In early trading, shares of Vardhman Textiles climbed nearly 6%, while Arvind surged 6.44% to hit its 52-week high on the National Stock Exchange.
Furthermore, Nitin Spinners recorded a gain of 5.53%, and Himatsingka Seide rose by nearly 5%. Shares of Welspun Living, Trident, and Gokaldas Exports strengthened by approximately 4%. Meanwhile, KPR Mill saw a rise of 2.2%, while Kitex Garments and Pearl Global Industries gained around 2%. Shares of Kewal Kiran Clothing remained relatively stable.
The Ministry of Finance believes that this temporary duty exemption will help reduce input costs across the entire value chain of the textile and apparel sector. This is expected to provide relief to both manufacturers and consumers, while also seeking to strike a balance with the interests of domestic cotton producers.
The Ministry stated that improved cotton availability will enhance the competitiveness of the domestic textile industry. Small and Medium Enterprises (SMEs), in particular, are likely to benefit from this, as they will receive relief on both the fronts of raw material supply and costs.
read more :- India Waives Cotton Import Duty Until October 2026
