New Delhi

To give relief to the textile sector from the US tariffs, the Central Government announced to extend the exemption of import duty on cotton till December 31, 2025. The move is aimed at ensuring adequate availability of cotton for the domestic textile industry, according to a Ministry of Finance press release. It also stated that further notifications will follow.

The release noted, "To augment 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.  In order to support exporters further, the Central Government has decided to extend the import duty exemption on cotton (HS 5201) from 30th September 2025 till 31st December 2025."

The government had earlier given temporary relief to the sector by exempting import duty on cotton between August 19, 2025 and September 30, 2025. Now, the exemption has been extended by another three months to support exporters and the textile sector.

Earlier, talking to ANI, Confederation of Indian Textile Industry (CITI) Chairman Rakesh Mehra had highlighted on Tuesday the importance of the textile sector in the national economy. "India's textile and apparel sector contributes around 2 per cent to the country's GDP and is also one of the biggest providers of jobs and livelihoods," he said.

He further pointed out that the United States remains the single-largest market for Indian textile and apparel items, accounting for almost 28 per cent of exports. In 2024-25 alone, India's exports of these products to the US were valued at nearly USD 11 billion. China is the largest supplier of textiles and apparel to the US, followed by Vietnam, India, and Bangladesh. At present, US tariff rates for Vietnam and Bangladesh stand at 20 per cent, considerably lower than the 50 per cent imposed on Indian product exports.

Earlier this month, textile bodies welcomed the waiver of customs duty on cotton imports until September 30, stating it would offer immediate relief to manufacturers and exporters grappling with uncertain supplies.

Chandrima Chatterjee, Secretary General of CITI, said the decision was a result of persistent appeals from industry representatives. "It's a great move for the Indian industry, and if that also gives any positive signal to the negotiations, then I think it's a win-win for both sides. But I think the primary trigger has been the repeated concern being raised by the industry bodies and the associations," she stated.

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Now with the extended exemption of customs duty till 31st December 2025, the sector gets a much-anticipated relief till a negotiated trade deal is signed with the U.S.