The textile industry has thanked Prime Minister Narendra Modi, and Union Ministers Nirmala Sitharaman, Shivraj Singh Chouhan, Piyush Goyal, Giriraj Singh for exempting cotton from 11% customs duty and agriculture cess on raw cotton imports effective from June 1 to October 31 ,2026.

The Ministry of Finance issued a notification on May 30, 2026 exempting the 5% Basic Customs Duty, 5% Agriculture Infrastructure and Development Cess (AIDC), and 10% Social Welfare cess on both, totalling 11% to help manufacturers cope with severe supply concerns and input cost pressures. India’s textile industry is experiencing growing export opportunities but continues to face challenges due to cotton shortages and higher domestic cotton prices. The temporary duty exemption will enable access to competitively priced quality cotton from global markets, helping reduce costs and improve industry competitiveness.

According to industry representatives, this stabilisation is expected to help Indian exporters capitalise on emerging Free Trade Agreements (FTAs). Cotton accounts for nearly 65% of the yarn, and 25-30% of the garment / home textiles manufacturing cost, making its availability and price a critical determinant of the competitiveness. Stable and affordable cotton supplies are particularly important for exporters who operate under long-term contracts and supply-nominated business arrangements, where fluctuations in raw material prices can significantly impact profitability and delivery commitments.

The textile industry is facing a cotton shortage of 40–50 lakh bales, with domestic production of around 290 lakh bales falling short of the annual requirement of 330–350 lakh bales. Despite having 38% of the world’s cotton cultivation area, India contributes only 19% of global production due to low productivity levels.

Industry representatives said India may take 7–10 years to achieve self-sufficiency in cotton production through the ₹5,659-crore Mission for Cotton Productivity. They noted that technological adoption, regulatory approvals, mechanisation, and improved farming practices are essential to boosting productivity and quality.

Chairman of CITI Ashwin Chandran, Vice-Chairman of TEXPROCIL Ravi Sam, Chairman of SIMA Durai Palanisamy, Deputy Chairman of SIMA S. Krishnakumar, and Secretary General of SIMA K. Selvaraju, also appreciated Tamil Nadu Chief Minister C. Joseph Vijay for urging the Centre to remove the 11 per cent cotton import duty.

They stated that an uninterrupted supply of quality and customer-specified cotton is essential for the predominantly cotton-based textile industry, which supports the livelihoods of nearly 8 crore rural workers, particularly women.

Industry representatives also noted that competing textile-exporting countries such as Bangladesh, Vietnam, Pakistan, Indonesia and Turkey allow duty-free cotton imports.