India may continue its 11% cotton import duty waiver through December, potentially easing costs for textile mills, Reuters reported Monday, citing three government and industry sources.
The Ministry of Finance’s current notification covers cotton imports under tariff heading 5201 from June 1 through Oct. 31. It waives customs duty and the Agriculture Infrastructure and Development Cess for that period. The government has not announced an extension.
The Ministry of Textiles linked the waiver to the price and availability of raw cotton for manufacturers. The Ministry of Finance said lower input costs could particularly benefit small and medium-sized textile and apparel businesses.
Estimates of India’s cotton needs help explain the pressure for continued relief, though the forecasts differ. Reuters cited trade estimates putting 2026-27 production below 29 million bales and demand above 34 million. An August report by staff at the U.S. Department of Agriculture’s Foreign Agricultural Service forecast production of 31.4 million 170-kilogram bales and domestic use of 33 million bales for a marketing year beginning in August.
The figures are not directly comparable. Reuters did not specify bale weight, and the sources do not establish a common forecasting method or reporting period.
Mills would save on import charges if the waiver continues. Reuters cited Dipanshi Agarwal, a principal analyst at S&P Global, as saying additional imports could put pressure on domestic cotton prices. That would pose a potential risk for growers.
Ashwin Chandran, chairman of textile industry group CITI, told Moneycontrol in September that six-month duty-waiver periods made business planning difficult. India extended a cotton import duty exemption through Dec. 31, 2025, because of a persistent gap between demand and supply, the Ministry of Textiles said.
Reuters’ sources said a decision would follow discussions among ministries, but gave no date. The existing exemption expires Oct. 31.
