India Considers Removing 11% Customs Duty on Raw Cotton Imports
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India's government is in advanced talks to potentially remove an 11% customs duty on raw cotton imports to ease cost pressures on the domestic textile industry, which faces a significant supply-demand gap.
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The government is in an "advanced stage of consultation" regarding the 11 per cent customs duty on imports of raw cotton, and examining if the levy can be removed, with a decision expected soon, a senior official said.
Ministries, including finance, textiles, and agriculture, are deliberating on the duty, with the textile industry seeking its removal to mitigate cost pressures on domestic companies due to high prices.
"We are talking to Finance and Agriculture (ministries), both, and it is in an advanced stage of consultation. We hope that the consultation will be finalised in the near future," the official told PTI.
A delegation comprising apparel industry representatives and exporters met Vice President C P Radhakrishnan and several Union ministers recently and sought the removal of the duty.
The delegation argued that the textile industry's cotton requirement for the current year is projected at around 337 lakh bales, whereas cotton arrivals for the 2025-26 season are estimated at 292.15 lakh bales, resulting in a supply-demand gap of nearly 45 lakh bales.
It said this shortage is putting pressure on spinning mills and downstream textile manufacturers due to the limited availability of high-quality raw materials and rising input costs.
