Government suspends import responsibility on cotton

The Ministry of Finance has eliminated the 11% import responsibility on cotton until September 30.

In a notification issued on August 18, the Ministry stated the Customs Duty won’t be levied from August 19 to September 30 (together with September 30) on cotton imports.

According to Nishant Asher, secretary of the Indian Cotton Federation, India imported 39 lakh bales of cotton within the 2024-2025 cotton season (October to September). Nearly two lakh bales of cotton are anticipated to be in transit now and these will profit from the elimination of the import responsibility. The Government ought to prolong the import responsibility exemption for cotton booked until September 30, he stated.

The Global Trade Research Initiative stated cotton imports surged 107.4%, rising from $579.2 million in FY 24 to $1.20 billion in FY 25. Major suppliers final yr included Australia ($ 258.2 million), the US ($ 234.1 million), Brazil ($ 180.8 million), and Egypt ($ 116.3 million).

Since February 2021, imports had been topic to 11% responsibility (5% Basic Customs Duty and 5% Agriculture Infrastructure & Development Cess). The waiver is anticipated to assist mills face excessive enter prices and assist yarn and material exporters battling competitiveness. The measure is a time-bound stopgap to stabilise markets earlier than the brand new crop arrives.

The Cotton Textiles Export Promotion Council chairman Vijay Agarwal stated the Government ought to take into account institutionalising an everyday coverage framework to allow duty-free imports of cotton throughout July to October yearly, coinciding with the southern hemisphere crop arrivals. This will allow textile mills to plan procurement properly upfront and keep India’s competitiveness within the world market.