New Delhi: The Indian government has announced an extension of its exemption on cotton import duties until December 31, 2025, providing a temporary lifeline to the country’s embattled textile and garment exporters. The move comes in the wake of heightened tariff pressures from the United States, which recently doubled import duties on Indian apparel and jewelry to 50 percent.
The duty relief, which suspends the usual 11 percent levy on imported cotton, is aimed at lowering input costs for domestic manufacturers who depend on global supplies to remain competitive. Although India is the world’s second-largest cotton producer, demand from exporters often exceeds domestic availability, making imports an essential part of the supply chain.
Industry analysts note that the exemption is more than just a trade adjustment it is a critical safeguard for India’s textile economy, which employs millions and contributes significantly to export revenues. With the U.S. accounting for $22 billion worth of Indian garment exports in 2024, industry leaders had warned that punitive tariffs could severely erode India’s share in its largest overseas market.
According to Atul Ganatra, President of the Cotton Association of India, the extension is expected to spur a record 4.2 million bales of cotton imports this fiscal year. He added that the duty-free access may even extend strong demand into the early months of 2026, helping cushion exporters against the sudden rise in U.S. tariffs.
The government’s decision has been welcomed by industry groups, who had lobbied strongly for the relief. They argue that the reduced raw material costs will not only protect margins but also help preserve employment in a sector facing mounting global competition. India currently holds about 5.8 percent of the U.S. textile market but faces stiff challenges from Bangladesh, Vietnam, and China, which continue to expand their foothold.
Yet, the exemption is only a short-term measure. Trade experts caution that while it provides immediate breathing space, India will need to devise a longer-term strategy to counterbalance the U.S. tariff hike. Options under discussion include diversifying export markets, negotiating bilateral trade relief, and boosting domestic cotton productivity to reduce dependency on imports.
For now, the government’s decision is being seen as a pragmatic step to keep exporters afloat, with the broader challenge of sustaining India’s textile edge still looming large on the horizon.