The Indian government has extended the customs duty exemption on cotton imports by two months, until December 31, 2026. The move is intended to improve cotton availability in the domestic market and ease raw material costs for textile and apparel manufacturers.

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The exemption was earlier scheduled to end on October 31, 2026. The Ministry of Finance extended the deadline through a notification dated October 30, amending its earlier notification issued on May 30.

The extension is expected to help textile manufacturers secure cotton supplies and manage production expenses. Cotton is a key raw material for India’s textile and clothing industries, making its availability and price important factors across the manufacturing supply chain.

Small and medium-sized enterprises (SMEs), which may have less flexibility to absorb increases in raw material costs, are among the businesses expected to benefit from the continued exemption. Better access to imported cotton could help manufacturers manage input expenses and maintain production.

The government’s decision also seeks to balance the needs of textile producers with the interests of domestic cotton farmers. The effect on local cotton prices and farmer returns will depend on market conditions, import volumes and domestic supply.

Lower raw material costs could potentially ease prices for consumers if manufacturers and retailers pass on some of the savings. However, the extent of any price relief will depend on other production, distribution and retail costs.

The extension provides additional time for the textile and apparel sector to access cotton imports without the customs duty covered by the exemption. Its impact will become clearer as businesses respond to supply conditions and the cotton market evolves over the coming two months.