India's Finance Ministry has announced a waiver of the 11% import duty on cotton, effective from June 1 to October 31, 2026. This strategic decision aims to support the textile industry by reducing input costs and enhancing global competitiveness.
Impact on the Textile Industry
The waiver is expected to stabilize input costs across the textile value chain, including yarn, fabric, garments, and made-ups. This will provide relief to manufacturers and consumers, ensuring the sector remains competitive globally.
"The temporary duty exemption is expected to reduce input costs across the textile and apparel sector, thereby providing a targeted relief to manufacturers and consumers," stated the Finance Ministry.
Support for Domestic Farmers
The government has assured that domestic farmers' interests are safeguarded through the Minimum Support Price (MSP) mechanism operated by the Cotton Corporation of India Ltd. (CCI). For the 2026–27 marketing season, the MSP for cotton has been increased by ₹557 per quintal.
| Cotton Type | Previous MSP | New MSP |
|---|---|---|
| Medium-staple | ₹7,710 | ₹8,267 |
| Long-staple | ₹8,110 | ₹8,667 |
Historical Context and Future Outlook
The duty was last removed between August and December 2025, when US tariffs impacted manufacturing. The current exemption is part of a broader strategy to ensure stable access to high-quality cotton, crucial for the industry's growth and employment.
Conclusion
This policy change aligns with the government's 'Make in India' initiative, promoting domestic manufacturing and export growth. The waiver is expected to revive orders for small and medium enterprises and export-oriented units, supporting over 45 million jobs in the textile-apparel value chain.
