The Indian government has passed an order extending the cotton import duty exemption by three months till the end of December. The order is taken in the backdrop of the 50 per cent tariff imposed by Trump’s administration on India. The exemption will support the impacted textile industry, and as soon as it was announced on Thursday, the textile industry saw a growth of 0.2 per cent. Earlier, an 11 per cent exemption till the end of September was announced by India, which is also the second-largest producer of cotton in the world. The order has now been extended due to geopolitical conditions.
Officials report that cotton will be sourced from surplus countries like Brazil, the US, Australia, and Africa. The 50 per cent penalty tariffs by the US came into effect on Wednesday. The President of the Indian Cotton Association, Atul Ganatra, told Reuters that the order will, for the time being, ease the pressure on the textile industry by making cotton cheaper. He also said that this could raise India’s imports to a record 4.2 million bales this year and might continue in the first quarter of the upcoming year.
The decision is taken to boost cotton’s demand for the upcoming festival season of Dussehra and Diwali, and to cope with the tariffs, reports confirmed. The cotton output in India has seen a fall from 3.77 million bales in 2023 to 3.07 million bales in 2025. This is increasing our import demands, and as per exports, it will impact the textile sector by making clothes costlier and also threaten export competitiveness. India’s textile and cotton sector employs over 35 million people, and is the second highest employment sector in the country.
Amidst growing tensions, this move will certainly bring some relief to the workers and businesses involved in the sector. Representatives of apparel associations view this move as an opportunity for dialogue and trust between the US and India, as cotton was a major roadblock in the trade talks between the two countries. This step is viewed as India’s move to make things good again between the world’s largest economy and the world’s largest democracy.
