New Delhi, May 30: The Central Government has exempted customs duty on cotton imports for a five-month period beginning June 1, 2026, in a move aimed at improving cotton availability for the domestic textile sector and reducing input costs for manufacturers.

The decision was notified by the Ministry of Finance through a notification issued on Saturday. The notification exempts imported cotton from the entire basic customs duty as well as the Agriculture Infrastructure and Development Cess levied on the commodity.

According to the notification, the exemption will remain in force from June 1, 2026, up to and including October 31, 2026.

The Finance Ministry said the measure has been introduced "to augment availability of cotton for the Indian textile sector."

Explaining the rationale behind the decision, the ministry said the temporary duty exemption is expected to lower raw material costs across the textile value chain.

"The temporary duty exemption is expected to reduce input costs across the textile and apparel sector, thereby providing a targeted relief to manufacturers and consumers, while also keeping the interests of domestic farmers in mind," the Ministry said in a statement.

It said the move is expected to support the performance of the domestic textile industry, particularly small and medium enterprises that depend on stable cotton supplies.

"Overall, the measure is anticipated to have a positive impact on the performance of the domestic textile industry, especially the small and medium enterprises, ensuring better availability of cotton in the market," it added.

The customs notification was issued by the Department of Revenue under powers conferred by the Customs Act, 1962 and the Finance Act, 2021. It stated that the government was satisfied that granting the exemption was necessary in the public interest.

India's textile and apparel sector is one of the country's largest manufacturing industries and a major consumer of cotton. Industry participants have often sought lower import costs during periods of tight domestic supplies and elevated raw material prices. (ANI)