In a relief to the textile industry, the central government has completely waived the 11% customs duty and AIDC on the import of raw cotton. This exemption will be effective from August 19 to September 30, 2025. This step will provide temporary relief to the textile industry amidst challenges such as inflationary pressure and US tariffs.
New Delhi: In a major decision on the long-standing demand of the textile industry, the central government has announced the removal of the 11% customs duty and the Agriculture Infrastructure and Development Cess (AIDC) levied on the import of raw cotton from August 19, 2025, to September 30, 2025. This step has been taken to provide relief to the textile industry amidst high prices, falling foreign demand, and US tariffs. The government says that this temporary exemption has been given in the public interest, which will provide great relief to textile companies struggling with inflationary pressure.
A Relief Measure for Textile Companies
Until now, a customs duty of 11 percent was levied on the import of raw cotton in India. But the government has announced a complete exemption on this for 42 days. The textile industry has been demanding this exemption from the government for a long time. People associated with the industry said that the continuously increasing prices of cotton and high duties on imports had increased their costs. This was also affecting the prices of domestically made clothes.
Government's Decision Amidst Rising Inflation
The central government has clarified that this decision has been taken keeping in view the compulsion of the industry. The textile industry is currently under inflationary pressure. Removing the duty on raw cotton will give them some relief. The government believes that this step will give the textile industry a chance to compete in the global market.
Benefit to Lakhs of People Associated with Employment
India's textile industry is one of the largest employment-providing sectors in the country. Millions of people are directly and indirectly associated with it. In such a situation, removing import duty on cotton will reduce the burden on companies and this will directly affect employment. The units that were facing increasing cost pressure will now feel some relief.
US Tariffs and Foreign Market Challenges
Recently, the US has imposed heavy tariffs on Indian textiles. This has further increased the difficulties of exporters. Foreign demand was already decreasing, and now additional tariffs have weakened the competitiveness of Indian companies. In such a time, the exemption given by the government on cotton imports will prove to be a relief for the industry. However, this exemption is temporary and the old rules will be applicable again after September 30.
Old Demand of Textile Industry
Organizations associated with the industry had been placing their demands before the government for a long time. They said that the high prices of cotton had reduced their profits. Due to the duty levied on imports, they have to incur additional expenses. Due to this, clothes made in the domestic market were becoming expensive and their hold in the foreign market was also weakening.
Companies Struggling with Expensive Cotton
For the past few months, the prices of raw cotton were continuously increasing. Companies that did not have stock in advance were forced to buy cotton at higher prices. This had increased the cost of production. This is the reason why small and medium-level textile units were under the most pressure. This decision of the government is like a sigh of relief for them.
Temporary Exemption Will Provide Balance
Even though this exemption is only for 42 days, it will definitely provide relief to the industry for a short time. Companies will be able to make their production plans and complete orders easily. Experts believe that this step will also affect the prices of clothes in the market and customers may also feel some relief.
