India extends duty-free cotton imports to 31 December as mills seek cheaper raw material
India has extended its duty-free window for cotton imports by two months, to 31 December 2026, giving textile mills more time to buy raw cotton from abroad without paying the 11% import duty. The Finance Ministry issued the extension on 30 October, a day before the waiver was due to end.
The change came through Notification No. 35/2026-Customs, which amends the original order of 30 May 2026. That order had removed the duty on cotton imports from 1 June to 31 October. The government said the extension would improve cotton supplies in India and ease costs for textile and clothing makers, especially small and medium businesses.
The decision comes as India’s own cotton crop looks tight. Trade estimates put production for the 2026–27 season below 29 million bales, against domestic use of more than 34 million bales. Commerce Ministry figures show cotton imports rose 63% from a year earlier to $1.1 billion in the first six months of the financial year, and the extension is expected to encourage more buying from suppliers such as the United States, Brazil and Australia.
Why it matters
Cheaper imported cotton should help mills keep their costs down and keep cloth and clothing prices in check. But the timing is sensitive: the new domestic crop is arriving now, and farmers worry that duty-free imports could push local cotton prices down just as growers are selling their harvest.
What happens next
The waiver now runs to 31 December, and the government has not said whether it will extend it again. Mills will watch import prices closely, since high world prices, shipping costs and a weaker rupee could eat into the savings from the duty cut.
This article is for general information and education only. It is not legal or financial advice.
Sources
- https://www.newkerala.com/news/a/centre-extends-customs-duty-exemption-cotton-imports-till-235.htm (NewKerala/ANI, 31 October 2026)
- https://eng.ruralvoice.in/national/india-extends-cotton-import-duty-exemption-until-december-31-raising-concerns-over-farmers-interests.html (Rural Voice, 31 October 2026)
