India cuts import duty on cotton: What it means for the fashion industry

Time of India

8 hours ago

India has temporarily removed the 11% import duty on raw cotton until September 30, aiming to boost its textile industry. This move, eliminating both basic customs duty and agriculture infrastructure cess, seeks to lower costs for mills and cool down fabric prices.
Cotton has been India's crown jewel for centuries, the fibre that travelled on ancient trade winds, the reason why muslin from Bengal was once more coveted than silk in European courts.
Even today, cotton is more than just a crop here; it's the backbone of our textile economy and the heartbeat of millions of weavers, spinners, and garment workers.
This week, New Delhi made a move that could send ripples from Indian spinning mills to fashion racks in Paris and New York. The government has suspended the 11% import duty on raw cotton until September 30, a step that's as much about politics and global trade diplomacy as it is about keeping our fabric supply smooth.
The decision, announced late Monday, wipes out both the 5% basic customs duty and the 5% agriculture infrastructure and development cess, a measure officials have called 'necessary' and 'in public interest.' In simpler terms? It means Indian mills can source cotton more cheaply, potentially cooling prices on everything from everyday T-shirts to the finest handloom sarees.
Why now?
The move comes at a tense moment. India's apparel exporters are staring down the barrel of nearly 60% tariffs in the US market that's an existing 25% duty plus an additional 25% penalty linked to India's Russian oil purchases.
Compare that to Bangladesh's 20% duty or Vietnam's 20%, and you can see why our exporters are feeling the heat. Cotton prices at home have also been climbing, straining small and medium enterprises (SMEs) that form the bedrock of our textile and fashion industry.
The global cotton web
Cotton is one of those commodities where weather in Texas, policies in Beijing, and harvests in Gujarat can all influence the price of your summer kurta. India has long been a cotton powerhouse, the world's largest producer and a top exporter.
But in recent years, shifts in global trade have altered the map. Since import duties were slapped on cotton in 2022, mills have moved away from US cotton (whose share dropped from 40–50% to a projected 19% this year) and started sourcing more from Brazil.
Last year alone, India's cotton imports doubled, up 107% to $1.2 billion from $579 million the year before, according to the Global Trade Research Initiative (GTRI).
Industry bodies like the Confederation of Indian Textile Industry (CITI) have been lobbying hard for relief, warning that high raw material costs were eroding India's competitive edge.
From field to fashion
For the average consumer, these policy moves can feel abstract. But think of it this way, cotton isn't just the yarn in your bedsheets or the fabric in your white shirt; it's the first stitch in the entire fashion supply chain. Lower raw cotton prices can mean more affordable fabrics for domestic designers, more competitive pricing for export orders, and fewer bottlenecks for traditional handloom sectors that rely on high-quality fibre.
A legacy worth protecting
India's cotton story is woven with history, from the ancient Indus Valley cotton trade to Gandhi's spinning wheel symbolising self-reliance. But in today's global fashion market, sentiment alone doesn't keep looms running. It takes policy decisions like this, strategic diplomacy, and adaptability to keep our textiles not just surviving but thriving.
Whether this temporary duty cut will be extended beyond September is anyone's guess. For now, it's a window of relief for the industry, a nod to our cotton legacy, and perhaps, a subtle message to global trade partners that India is ready to talk.