Govt in advanced stage of consultation on cotton import duty removal
New Delhi, May 22: India is moving closer to a decision on whether to remove the 11% customs duty on raw cotton imports, as the government enters what officials describe as an “advanced stage of consultation” involving key ministries including finance, textiles, and agriculture.
The discussions come amid sustained pressure from the textile industry, which argues that high domestic cotton prices are hurting competitiveness and increasing input costs for spinning mills and downstream manufacturers.
Policy discussions on import duty
According to a senior government official, inter-ministerial consultations are actively underway to evaluate whether the current import duty structure should be retained or scrapped. The final decision is expected soon, though no specific timeline has been confirmed.
The talks involve balancing fiscal considerations with the needs of the textile sector, which is one of India’s largest employment-generating industries.
Industry pressure over rising costs
Industry representatives have been lobbying for duty removal, citing rising cotton prices and supply constraints in the domestic market. A delegation of exporters and apparel industry stakeholders recently met senior government officials, including the Vice President, to press their case.
They highlighted that domestic cotton availability is falling short of demand, leading to higher procurement costs for manufacturers who rely heavily on raw cotton for production.
Supply-demand gap concerns
The textile sector estimates that its annual cotton requirement stands significantly higher than current projected arrivals for the 2025–26 season. This gap has raised concerns among manufacturers about raw material shortages and price volatility.
With production lagging behind demand, industry players argue that import duty removal could help stabilise supply and ease cost pressures across the value chain, from spinning mills to garment exporters.
