The Indian government has temporarily removed the 11% customs duty on raw cotton imports from 19th August to 30 September 2025. The move aims to:
· Address domestic shortages as India’s cotton output fell to 30.7 million bales in FY25, down from 33.7 million in FY23.
· Stabilize cotton and yarn prices ahead of the festive season.
· Ease trade tensions with the US, where exporters stand to benefit after Washington imposed steep tariffs on Indian goods.
India imports cotton mainly from the US, Brazil, Egypt, Australia, and African nations. Imports surged to 2.71 million bales in FY25, up sharply from previous years.
Industry bodies such as CITI welcomed the step, though they noted its temporary nature. Experts describe it as a “calibrated gesture” to maintain leverage in ongoing trade negotiations.
The decision comes amid rising geopolitical strains: the US postponed its latest trade talks with India, while China has increased duties on US cotton, making India a key alternative market.
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