Central Government Extends Import Duty Exemption on Cotton till December 31, 2025; Textile Stocks in Spotlight

The Central Government has extended the import duty exemption on raw cotton till December 31, 2025, aiming to ease supply constraints for the textile industry and lower input cost pressures for manufacturers and exporters.

Central Government Extends Duty-Free Cotton Imports

On August 28, 2025, the Ministry of Finance announced that the duty exemption on cotton under tariff code HS 5201, first implemented on August 19, 2025 and earlier valid till September 30, 2025, will now continue till December 31, 2025. This decision seeks to counter rising raw material costs faced by the Indian textile value chain and maintain stability during the peak festive and export season.

Boost for Textile Sector Amid Rising Costs

The extension comes as a relief for textile businesses struggling with higher input prices. Companies engaged in spinning, weaving and garment manufacturing are expected to benefit through enhanced raw cotton availability at reduced costs. This could improve sectoral margins while supporting competitiveness in both domestic and international markets.

Impact on Leading Textile Stocks

Several listed textile companies are likely to gain attention following the government’s announcement. These include Arvind Ltd, Raymond Ltd, Vardhman Textiles, KPR Mill Ltd and Welspun India, all of which have significant exposure to cotton-based products and exports. Stable cotton prices could provide a favourable outlook for their operational performance.

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Government Support Towards Textile Exports

The Ministry of Textiles highlighted that the extension aligns with India’s goal to enhance export competitiveness. Given strong global demand for fabrics, garments and home textiles, an uninterrupted cotton supply at zero duty can aid exporters in meeting international commitments with improved cost efficiency. An official notification confirming this extension till December 31, 2025, will be released soon.

Conclusion

The extension of import duty exemption on cotton till December 31, 2025 provides timely support to India’s textile sector. By ensuring cheaper cotton imports and reduced input costs, this move strengthens the industry’s ability to sustain production and export growth during a crucial demand period.

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