Govt Suspends Cotton Import Duty Till Sept 30 Amid US Tariff Hike

The Government of India has suspended import duties on raw cotton till September 30, offering relief to the country’s garment industry, which has been hit hard by the United States’ decision to impose a 50% tariff on Indian exports.

The exemption, announced late Monday through a Ministry of Finance notification, comes into effect from August 19. Before this move, cotton imports were subject to an 11% duty.

According to the notification by the Central Board of Indirect Taxes and Customs (CBIC), all imports under heading 5201—covering raw cotton—will remain duty-free during this period.

Industry Relief

The decision comes after repeated appeals from industry bodies such as the Confederation of Indian Textile Industry (CITI), which had sought duty removal to improve global competitiveness. The announcement boosted textile stocks on Tuesday, with companies like Vardhman Textiles, Raymond Lifestyle, Indo Count, and Welspun Living gaining between 3% and 8%, Reuters reported.

Trigger: US Tariffs on Indian Exports

The temporary relief comes against the backdrop of fresh tariff measures by US President Donald Trump, who recently imposed a 50% tariff on Indian shipments—combining an existing 25% levy with an additional 25% penalty linked to India’s purchase of Russian oil.

India’s Response to US Action

India strongly criticized the US move, calling it “unfair, unjustified and unreasonable.” In a statement, New Delhi said:

1. India’s oil imports are based on market dynamics and aimed at ensuring the energy security of 1.4 billion people.

2. Several other countries are taking similar actions in their own national interest.

3. The US decision to penalize India is therefore “extremely unfortunate.”

4. India will take all necessary measures to protect its national interests.