Govt exempts import duty on cotton till October

In a decisive move to bolster its beleaguered textile industry, India's government has suspended the 11% import duty on cotton until October 30, 2026. This critical policy intervention, announced today, aims to immediately reduce raw material costs and ensure stable supply for spinning mills grappling with high domestic prices and global supply chain volatility, directly impacting the competitiveness of Indian apparel and fabric exports. The exemption comes amidst a challenging period for the Indian textile sector, which has seen its margins squeezed by a confluence of factors: underperforming domestic cotton production in the 2025-26 season due to erratic weather, firming global cotton prices driven by demand and geopolitical uncertainties, and aggressive competition from rival textile-producing nations. Industry bodies, including the Textile Export Promotion Council (TEXPROCIL), have been lobbying intensely, warning that without relief, capacity utilization would further drop, jeopardizing millions of jobs and India's position in the global value addition chain. Looking ahead, the market will closely watch the progression of the Southwest Monsoon, critical for the upcoming 2026-27 cotton crop, to assess if domestic supply can stabilize. This temporary measure is designed to bridge the gap until the new harvest begins flowing into markets, allowing Indian mills to fulfill existing export orders and potentially regain some lost ground. However, the long-term sustainability of the sector will hinge on enhancing domestic yields and reducing its vulnerability to both climatic shocks and global commodity price swings.