India’s textile sector is poised for a resurgence as the government’s decision to suspend customs duties on cotton imports is set to bring much-needed relief to manufacturers, exporters, and small businesses across the value chain. The move, which comes into force from June 1 and continues through October 30, is expected to enhance the industry’s competitiveness globally and provide a crucial buffer against volatile cotton prices.Policy background: Addressing supply crunch and cost pressuresTextiles announced the temporary suspension of customs duties on all cotton imports for a five-month period, citing the need to stabilize domestic supply and moderate input costs. This policy intervention was prompted by a series of challenges faced by the textile sector, including high raw material prices and supply shortages during the cotton off-season. Industry observers note that India, despite being a leading cotton producer, has seen significant cost pressures in recent months, affecting both large exporters and MSMEs.Industry welcomes timely interventionApparel Export Promotion Council (AEPC) highlighted that the waiver would particularly benefit small and medium-sized enterprises, which have struggled under the burden of rising cotton and yarn prices. AEPC Chairman A Sakthivel, speaking to PTI, emphasized that the duty waiver was not only timely, but essential for the survival and competitiveness of MSMEs. He called on spinning mills to reflect reduced input costs in yarn prices, suggesting that this would stabilize the entire value chain and empower exporters to compete more effectively in global markets.Overcoming global disadvantagesConfederation of Indian Textile Industry (CITI), represented by Chairman Ashwin Chandran, pointed out that the previous 11 per cent import duty had placed Indian exporters at a disadvantage compared to key Asian competitors who already enjoyed duty-free access to cotton. Chandran noted that, with the removal of this barrier, Indian textile and apparel manufacturers can better capitalize on emerging opportunities from new Free Trade Agreements (FTAs), particularly as global markets remain volatile. The expectation is that reduced input costs will translate into more competitive pricing for Indian exports, supporting the government’s target of reaching $100 billion in textile and apparel exports by 2030.Support for MSMEs and the export value chainSafeguarding farmer interests and ensuring market stabilityImplications and outlook for the textile sectorLooking ahead: Building resilience in Indian textiles
- Policy & Rural Economy
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India's textile sector applauds cotton duty waiver, anticipates stronger exports and MSME growth
India's decision to waive customs duties on cotton imports is expected to ease input costs for the textile sector, support MSMEs, and enhance export competitiveness. Industry bodies welcome the move, seeing it as a timely measure to boost growth and stabilize the supply chain.