India Temporarily Waives Cotton Import Duties Amid US Tariff Spat

To shield its textile industry from the fallout of increased US tariffs, India suspends cotton import duties until September 30.

In a strategic move to support its textile sector and ease cost pressures, the Indian government has temporarily lifted import duties on raw cotton. The exemption, effective from August 19 until September 30, was confirmed through a late-night notification issued by the Ministry of Finance.

The decision comes as India grapples with trade tensions, particularly after US President Donald Trump imposed a 50% tariff on Indian exports—25% already in place and an additional 25% set to be enforced soon. The move was reportedly triggered by India’s ongoing oil trade with Russia.

Prior to this exemption, cotton imports into India attracted an 11% duty. The waiver will apply specifically to items under tariff heading 5201, which includes raw cotton. The Central Board of Indirect Taxes and Customs (CBIC) officially confirmed this in a circular quoted by LiveMint.

Industry organisations, such as the Confederation of Indian Textile Industry (CITI), had been lobbying for this relief, arguing that Indian manufacturers were becoming less competitive due to high input costs. Their demands have now been met, at least temporarily.

The announcement had an immediate impact on the stock market, with textile companies like Vardhman Textiles, Raymond Lifestyle, Indo Count, and Welspun Living witnessing a surge of 3–8% on Tuesday, according to a Reuters report.

🇮🇳 India Responds to US Tariffs

The Indian government strongly criticised the new tariffs, calling them “unfair, unjustified, and unreasonable.” In an official response, it reiterated that oil imports from Russia are determined by economic and energy security needs, not geopolitics.

“Our import decisions are driven by national interests and market factors. We regret that the US has chosen to penalise India for actions that are neither unique nor isolated,” an official stated.

India has affirmed it will take “all necessary steps” to safeguard its interests, including trade realignments and diplomatic pressure.