India removes import duty on cotton in temporary relief for garment industry

19/8/2025 13:09

India has exempted import duties on cotton from August 19 to September 30, fulfilling the demand of industry groups who said exemptions would help make the sector more competitive.



The temporary suspension of the duty, announced in a government order late on Monday, is seen as a relief for India’s garment industry, which is reeling from a steep 50% tariff on shipments to the United States.



The U.S. tariff comprises an existing 25% levy and an additional 25% set to take effect later this month, imposed as a penalty for India’s purchases of Russian oil. The effective rate compares unfavourably with 20% for Bangladesh and Vietnam, and 30% for China.



Industry bodies such as the Confederation of Indian Textile Industry (CITI) had urged the government to scrap the cotton import duty to help make the sector more competitive.



Before the exemption, cotton imports were subject to an 11% duty.



Industry officials now expect the government to extend duty-free cotton imports beyond September.