The temporary duty exemption, till 31 October 2026, is expected to reduce input costs across the textile and apparel sector
To augment availability of cotton for the Indian textile sector, the central government has temporarily exempted all customs duties on import of cotton from 1 June 2026 till 31 October 2026. Shares of textile and apparel manufacturers gained in early trade on Monday.
Shares of Arvind Fashions reached a high of Rs 466 apiece on the National Stock Exchange, while shares of Gokaldas Exports reached the peak of Rs 734.8 apiece, after opening at Rs 715. Similarly, the shares of Welspun reached a high of Rs 146 apiece on Monday.
The Ministry of Finance said that the temporary duty exemption is expected to reduce input costs across the textile and apparel sector, thereby providing a targeted relief to manufacturers and consumers, while also keeping the interests of domestic farmers in mind.
“The duty relief is expected to reduce input costs across the value chain, improve cotton availability and strengthen the competitiveness of Indian textile exports particularly through emerging Free Trade Agreements. Sanathan stands to benefit as Cotton Yarn manufacturing significantly contributes to the company’s revenue,” the company said in an exchange filing.
The company added that this was a structural cost barrier that had long disadvantaged Indian textile manufacturers relative to Asian competitors who already operate with duty-free cotton access. India’s textile and apparel sector contributes 2.3 per cent to the gross domestic product (GDP), 13 per cent to industrial production and 12 per cent to total exports, employing an estimated 50 million workers, it added.
The Centre emphasised that the measure is anticipated to have a positive impact on the performance of the domestic textile industry, especially the small and medium enterprises, by ensuring better availability of cotton in the market.
