new delhi, Aug 28
Aday after the imposition of Trump tariffs on Indian goods, the central government announced the extension of the import duty exemption on cotton (HS 5201) from 30th September 2025 till 31st December 2025. In a statement on Thursday, the Finance Ministry said to augment the availability of cotton for the Indian textile sector, the Central Government had temporarily exempted the import duty on cotton from 19th August 2025 till 30th September 2025.
Notably, the government had announced on August 18 that the 11 per cent import duty will be suspended till September 30, when the current cotton marketing season will end. The cotton season falls between 1 October 2024 and 30 September 2025, and as per the reports, India is expected to close the current cotton season with nearly 40 lakh bales of imports.
Earlier, the manufacturers had also flagged that the duty exemption given till September 30 was too short a window to place fresh orders and would only help in-transit shipments. It is to be highlighted that cotton was among the four items that saw the sharpest increase in Minimum Support Price (MSP) by the government in May this year, as cotton production has been declining over the years. On the Trump tariffs coming into play, the Global Trade Research Initiative (GTRI) has also said that almost all of India’s USD 1.20 billion cotton imports in FY2025 were of staple length 28 mm or above, and that under the India-Australia Economic Cooperation and Trade Agreement (ECTA), 51,000 MT of such cotton already enters duty-free. This means the biggest winner from India’s new duty-free window will be the US, the GTRI said. Hemant Jain, President, PHDCCI, also mentioned that the government has formulated and deployed a comprehensive multi-dimensional strategic framework designed to mitigate adverse economic impacts while strengthening the nation’s export competitiveness.
“Central to this response is the establishment of a substantial Rs 25,000 crore financial support mechanism under the Export Promotion Mission (EPM), structured across six financial years spanning 2025-2031.
This strategic initiative is specifically designed to provide enhanced access to affordable credit facilities, facilitate improved market penetration opportunities, and create a robust buffer mechanism to insulate Indian exporters from the deleterious effects of the tariff regime,” he noted.
