India Extends Duty-Free Cotton Imports Until December 31, 2025

New Delhi :- India has extended its import duty exemption on cotton by three months, allowing duty-free purchases until December 31, 2025, according to a Reuters report. The decision is designed to support the domestic garment industry, which is facing challenges from high US tariffs and slowing global demand.

The government had earlier scrapped the 11% duty on imported cotton until the end of September. With the fresh extension, textile companies can now source cheaper supplies from Australia, Brazil, the US, and Africa, where surplus cotton is available.

Impact on Prices

The announcement pushed global cotton prices higher, but analysts believe it could put pressure on Indian cotton farmers. Imported cotton is currently 5–7% cheaper than local produce and often of better quality. Since most imports will arrive around December—when the domestic harvest hits the market—local prices may face additional downward pressure.

Boost for Textile Mills

For textile mills, the duty-free extension brings crucial relief. The earlier deadline in September was too short to allow large shipments, as imports from overseas suppliers typically take more than a month to arrive. With the new deadline, mills have more time to secure affordable raw materials.

According to the Cotton Association of India, imports could climb to a record 4.2 million bales this year, with demand likely to remain strong into early 2025.

Pressure from US Tariffs

The US—India’s largest market for garments and jewellery worth about $22 billion annually—recently doubled tariffs on Indian goods to as high as 50%. With overseas demand weakening, cheaper imported cotton will help lower costs for Indian exporters and keep the industry competitive.

As the world’s second-largest cotton producer, India relies heavily on domestic crops. However, in the coming months, imports are expected to play an increasingly vital role in stabilizing the textile sector.