India has extended its cotton import duty exemption until 31 December 2026, and the Confederation of Indian Textile Industry (CITI) has welcomed the move. A tax-notification summary lists the instrument as Customs Notification 35/2026 (T), dated 30 October 2026, covering raw cotton under tariff heading 5201.
The extension was reported by Textiles Resources on 2 November 2026.
What Does the Cotton Import Duty Exemption Change?
Raw cotton can continue to enter India without customs duty until the end of December 2026. CITI Chairman Ashwin Chandran said the waiver would improve the competitiveness of India’s textile and apparel sector, which aims for exports worth $100 billion by 2030. He said: “The step gives the value chain near-term certainty.”
Chandran also said imports are needed to close the gap between demand and supply caused by lower domestic output, adding: “Imports do not push out home-grown cotton.”
Why Do Mills Want Duty-Free Cotton?
A joint study by Gherzi and the International Cotton Advisory Committee, published in May 2026, found that Indian manufacturers need a cotton policy framework to compete with Asian rivals that have duty-free access to overseas fibre.
Southern India Mills Association (SIMA) chairman Durai Palaniswamy estimated that the industry imported about 72 lakh bales in the 2025-26 season, helped by temporary exemptions from June to October. Cotton entered India duty-free from 2008 to 2021, and temporary exemptions have been granted since 2022. Palaniswamy called for duty-free imports of all cotton varieties through 2030.
Market Reaction and Industry Response
CITI and SIMA both backed the extension. Domestic cotton arrivals stayed sluggish, at or below 70,000 bales daily, during the first month of the 2026-27 marketing season, which runs from October 2026 to September 2027. No stock-market reaction was found in the sources reviewed.
What Happens Next?
The waiver ends on 31 December 2026, so the industry will again look to the government for a decision on the next period. SIMA has asked for a longer horizon, and the sources do not say whether the government will grant it.
Frequently Asked Questions
Until when is the cotton import duty exemption valid?
The exemption has been extended until 31 December 2026.
Who welcomed the extension?
CITI, whose chairman Ashwin Chandran called it a step that gives the value chain near-term certainty.
How much cotton did India import in 2025-26?
SIMA chairman Durai Palaniswamy estimated about 72 lakh bales in the 2025-26 season.
Source: Textiles Resources, 2 November 2026; customs notification summary on TaxGuru for the week ending 1 November 2026.
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