From August 19 to September 30, 2025, the Indian government temporarily suspended all tariffs to raw cotton venues. The exemption takes up an import duty of eleven percent, which consisted of a base custom of five percent, a tax for agricultural infrastructure and development of five percent and a social surcharge of ten percent. The aim of this measure is to stabilize domestic cotton prices, reduce the input costs for the textile industry and to strengthen India’s export competitivity.
This step comes in particular to American exporters: inside, who had worked for easier market access in India after the United States had introduced tariffs on Indian products at the beginning of the year. The decision is evaluated as a sign of flexibility New Delhis in the ongoing bilateral trade talks with Washington-especially in sensitive sectors such as agriculture and dairy.
The USA canceled its planned visit to Neu-Delhi for the sixth round of trade talks; A new appointment has not yet been announced. The decision to suspend the cotton import was after the reciprocal tariffs of US President Donald Trump in the amount of 25 percent of Indian exports on August 7th. Due to new measures related to the Indian oil trade with Russia, these tariffs could increase to 50 percent on August 27.
India frees raw cotton sports of tariffs
India’s textile sector depends heavily on cotton. The cotton value creation chain employs almost 35 million people and accounts for around 80 percent of the country’s total textual exports. The government’s measure also reacts to a short domestic offer and rising prices that have triggered concerns about cost pressure in the textile industry.
Due to the approval of duty -free imports, the government wants to stabilize the raw material prices before the festival season, in which the demand for clothing is typically increasing. Cotton imports of India have risen suddenly and reached 2.71 million bales in the 2025 year 2025. In the 2024 financial year there were 1.52 million bales, in the 2023 million bale financial year. In contrast, domestic cotton production has decreased: from 33.7 million bales in the 2023 financial year to an estimated 30.7 million bales in the 2025 financial year.
India imports cotton mainly from the United States, which have become an important source, especially after China has introduced additional tariffs on American cotton. Other important suppliers: Inside, Brazil, Egypt and African countries such as Benin, Tanzania and Mali, which provide special types of cotton that are not widespread in India. Australia also contributes to India’s cotton imports.
Indian textile shares add after the announcement
According to the government announcement, Indian textile stocks increased significantly. Some rose by up to eight percent on Tuesday. The stocks that were added included Vardman Textiles, Vardhman Spinning, Arvind, Nahar Spinning, KPR Mill and Trident. Vardhman Textiles’s shares rose by 9.3 percent, that of Ambika Cotton Mills by 7.6 percent and that of Welspun Living by 6.5 percent.
The temporary relief is considered a crucial step to strengthen India in competition with other textile production countries such as Bangladesh and Vietnam that compete with lower import costs. The positive market reaction reflects the optimism of investors: inside that the customs exemption reduces the cost pressure to the clothing industry and supports the general health of the textile and clothing sector. This sector makes an important contribution to the employment and exports of India.
This article was used with digital tools translated.
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