Govt exempts cotton imports from customs duty on till Sep 30 to boost textile sector

New Delhi, Aug 18 (IANS) In a move aimed at stabilising domestic cotton prices and supporting the textile industry, the government has waived all customs duties on the import of raw cotton with effect from August 19 until September 30, according to a statement issued by the Ministry of Textiles on Tuesday.

This exemption includes the removal of both the 5 per cent Basic Customs Duty (BCD), the 5 per cent Agriculture Infrastructure and Development Cess (AIDC), and a 10 per cent Social Welfare Surcharge on both. Cumulatively, the entire 11 per cent import duty on cotton has been exempted, the statement said.

The decision, notified by the Central Board of Indirect Taxes and Customs (CBIC), is expected to lower input costs across the textile value chain, encompassing yarn, fabric, garments, and made-ups and provide much-needed relief to manufacturers and consumers alike.

The exemption responds to persistent demands from the textile industry, which has been urging the government to eliminate import duties on cotton due to rising domestic prices and supply constraints, the statement said.

By temporarily waiving these duties, the government aims to enhance the availability of raw cotton in the domestic market, stabilise cotton prices, and thereby reduce inflationary pressure on finished textile products.

This will help to support the export competitiveness of Indian textile products by lowering production costs and protecting small and medium enterprises (SMEs) in the textile sector, which are more vulnerable to price fluctuations, the statement said.

This measure is expected to have a salutary effect on domestic cotton prices and support the overall health of the textile and apparel sector, which is a significant contributor to employment and exports in India, the statement added.

Various textile associations welcomed the step taken by the government to exempt all varieties of cotton from 11 per cent import duty with effect from Tuesday and thanked Prime Minister Narendra Modi and Textiles Minister Giriraj Singh for considering the industry's long-pending demand.

--IANS

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