India extends cotton duty waiver to Dec, US to benefit

Almost all of India's FY25 cotton imports were of the segment where the US is a key supplier

- Dhirendra Kumar

A day after the US's 50% tariffs on Indian goods took effect, the Indian government extended the exemption on raw cotton import duty and agriculture cess till 31 December 2025.

The relief, which was initially notified for the period between 19 August and 30 September, has now been expanded to cover the last three months of the year, according to the finance ministry. Earlier, cotton imports into India attracted a combined duty of around 11%.

The decision, while aimed at shoring up supplies for the domestic textile industry ahead of the festival season, is also being seen as a calibrated gesture toward Washington at a time of strained trade relations. The US is a key supplier of the most widely imported cotton variety.

This comes at a crucial time in India-US trade relations, with Washington recently imposing steep reciprocal tariffs on Indian exports and a standstill in trade negotiations.