New Delhi: The Indian government has announced a temporary exemption of import duties on raw cotton in a move aimed at easing the burden on the country’s garment and textile sector, which has been facing mounting challenges in the global market.

The exemption, effective from August 19 until September 30, 2025, removes both the 11 percent basic customs duty and the Agriculture Infrastructure and Development Cess (AIDC) on cotton imports. The decision is expected to lower input costs for textile manufacturers and provide a short-term lifeline to the industry.

The measure comes amid growing pressure on Indian exporters following the United States’ decision to impose a 50 percent tariff on Indian garment exports. The tariff, which combines an existing 25 percent duty with an additional 25 percent, was introduced as part of Washington’s retaliation over India’s continued purchase of Russian oil. This has placed Indian garment exporters at a steep disadvantage compared to competitors such as Bangladesh, Vietnam, and China.

Industry groups, including the Confederation of Indian Textile Industry (CITI), had been urging the government to act swiftly, warning that rising costs were threatening jobs and competitiveness. CITI Secretary Chandrima Chatterjee described the duty waiver as a long-pending demand that would help domestic cotton prices align with international markets, although she noted the relief remains temporary.

The announcement sparked immediate positive reactions in the stock market, with shares of several textile and cotton-related companies rallying. Vardhman Textiles, Indo Count Industries, Welspun Living, Ambika Cotton Mills, Kitex Garments, Gokaldas Exports, Raymond Lifestyle, Nitin Spinners, KPR Mills, and Siyaram Silk Mills all saw gains ranging between 1 and 9 percent following the news.

Analysts suggest the move could help preserve India’s export competitiveness at a time when rising costs and labor challenges have prompted concerns over production shifting overseas, potentially undermining the government’s “Make in India” initiative. The policy also aligns with the government’s long-term ambition to increase textile exports to 100 billion dollars by 2030.

While the relief is currently scheduled to end on September 30, industry stakeholders remain hopeful that the government will extend the duty waiver beyond the deadline to ensure sustained support for the sector during a period of heightened global trade tensions.