India has prolonged its India cotton import duty exemption by two months through the end of December, the government said, in a step meant to cool firm domestic cotton prices and cut raw-material costs for textile mills.
The waiver removes the usual 11% levy on imported cotton so mills can buy fibre from abroad without that charge. Officials also see scope for higher shipments from the United States, Brazil and Australia while the window stays open.
Why the duty-free window was stretched
India, the world’s second-largest cotton producer after China, first waived the 11% import duty from 1 June to 31 October to boost supplies in the lean season, when local stocks are typically tight. Textile mills pressed for more time as prices did not soften as expected.
Domestic cotton prices usually ease when new-season supplies arrive in October. This year they have remained firm because of worries about lower production after patchy monsoon rains. That squeeze left mills arguing that the cotton import duty waiver needed more runway.
What the extension is meant to do
Keeping the India cotton import duty exemption in place until year-end is intended to raise available supply, ease pressure on local prices and lower costs for spinning and weaving units. Cheaper imported cotton can help mills plan output without waiting only on the domestic crop.
The same opening can encourage exporters in the US, Brazil and Australia to send more cotton into the Indian market while the duty stays off. How much volumes rise will depend on global prices and mill demand through December.
Timeline: what has happened so far
- 1 June: India waived the 11% import duty on cotton to boost lean-season supply.
- June–October: The duty-free window ran as mills sought cheaper fibre.
- October: New-season cotton usually softens prices; this year prices stayed firm after patchy monsoon rains raised production concerns.
- 31 October: The original duty-free period was due to end.
- Through end-December: The government has extended the duty-free import window by two months.
Aasan alfaaz mein
Hindustan ne cotton par 11 percent import duty ko December ke end tak free rakha hai. Textile mills ko sasta cotton bahar se lene ka mauqa milega. Local prices abhi firm hain kyunke barsaat ke baad paidawar ki fikar hai. Is se kapra banane wali mills ki cost thori halki ho sakti hai.
