Central Government Extends Import Duty Exemption on Cotton; Textile Stocks Gain

August 28, 2025 MTIMES 99 Views Arvind Ltd, cotton import duty exemption, cotton prices India, Indian textile exports, KPR Mill Ltd, Raymond Ltd, textile industry news, Vardhman Textiles, Welspun India 3 min read

The Central Government has officially announced the extension of import duty exemption on cotton till December 31, 2025, offering a crucial lifeline to the Indian textile industry. This policy move aims to reduce raw material cost pressures for manufacturers and exporters while ensuring stability during the ongoing festive and export season.

Central Government Extends Duty-Free Cotton Imports Till December 31, 2025

On August 28, 2025, the Ministry of Finance confirmed that the exemption on raw cotton imports under HS code 5201, which was first notified on August 19 and initially valid until September 30, 2025, has now been extended till the end of this year. Officials stated that the decision will provide relief to spinning mills, garment producers, and weaving units facing high input costs amid fluctuating global cotton prices.

Boost for Textile Industry Through Lower Input Costs

The government’s move is expected to benefit multiple segments of the textile value chain. By allowing import duty exemption on cotton till December 31, 2025, textile companies can access cheaper raw materials, thereby improving operational margins. This step is also seen as a measure to keep Indian exporters competitive in international markets where pricing plays a decisive role.

Impact on Major Textile Stocks After Government’s Decision

Several major textile players are likely to see increased market focus following the announcement. Companies such as Arvind Ltd, Raymond Ltd, Vardhman Textiles, KPR Mill Ltd, and Welspun India are among those expected to benefit directly due to their strong dependence on cotton-based products and exports. Analysts believe that the extension could bring stability to earnings in the coming quarters.

Government’s Support to Strengthen Textile Exports

According to the Ministry of Textiles, this extension aligns with India’s broader goal of enhancing export competitiveness. With strong global demand for garments, fabrics, and home textiles, uninterrupted raw cotton supply at zero duty will enable exporters to meet commitments without cost escalations. An official notification reinforcing this extension till December 31, 2025, is expected to be published shortly.

The extension of the import duty exemption on cotton till December 31, 2025, is a significant step towards easing supply challenges and reducing input costs. By supporting both domestic manufacturers and global exporters, the move highlights the government’s commitment to stabilising the textile sector and promoting export growth during a crucial demand phase.

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