Cotton stays duty-free to import until 31 December

The Finance Ministry has extended the customs duty exemption on cotton imports by two months to 31 December 2026, after a 1 June-31 October window described as off-season - carrying duty-free imports into the first months of India's new cotton season.

What happened

• The Government extended the customs duty exemption on cotton imports until 31 December 2026, citing the raw material requirements of the domestic textile industry.
• The extension was notified by the Department of Revenue, Ministry of Finance, through Notification No. 35/2026-Customs dated 30 October 2026; the exemption, available until 31 October 2026, is extended by two months.
• The aim is to augment cotton availability at competitive prices, support domestic manufacturing, address specialised cotton requirements and support value addition across the textile and apparel value chain.
• The measure is expected to ease input cost pressures, support MSMEs and strengthen the competitiveness of Indian textiles in domestic and international markets.
• The Government says it remains conscious of the need to balance the textile industry's requirements with the interests of domestic cotton farmers; the Ministry of Textiles welcomed the Finance Ministry's decision.

For Prelims

• Exemption by notification: Section 25 of the Customs Act, 1962 lets the Centre exempt goods from customs duty by notification in the public interest. This extension is Notification No. 35/2026-Customs, issued by the Department of Revenue.
• The 2026 sequence: on 30 May 2026 the Government exempted cotton imports from 1 June to 31 October 2026, describing it as an off-season measure; the new notification carries it to 31 December 2026.
• The 2025 precedent: India waived the 11 per cent duty on cotton imports from 19 August to 30 September 2025, then extended it to 31 December 2025, as a 50 per cent US tariff on Indian garments took effect from 27 August 2025.
• Cotton season: India's cotton year runs from October to September, so the extension overlaps the first quarter of the 2026-27 season, when new-crop arrivals build up in mandis.
• Cotton Corporation of India: the Central nodal agency for MSP operations in cotton, buying when market prices fall below MSP; it now books procurement slots and pays through Aadhaar-linked accounts on the Kapas Kisan platform (carded 4 October, PRID 2318919).
• Cotton Productivity Mission: approved for 2026-31 with Rs 5,659.22 crore to raise yields (carded 5 May, PRID 2258111) - the long-term answer to the import need that duty waivers meet in the short term.
• Who decides: customs duty is set by the Department of Revenue in the Finance Ministry; the Ministry of Textiles announced and welcomed the extension but does not notify it.
• Who gains, who bears: spinning mills and garment exporters get cheaper fibre; cotton farmers face competition from imports in the months they sell. The release quantifies neither side.

For Mains

Syllabus: GS3.4 · GS3.1 · Linkage L1