In a decisive move ahead of the 31 October deadline, the Central Government has officially extended the customs duty exemption on raw cotton imports until 31 December 2026. Through an amendment to its earlier customs notification under Section 25(1) of the Customs Act, 1962, the Ministry of Finance has extended the zero-duty window by an additional two months, removing the threat of an immediate 11% import tariff returning on 1 November.
Relief for Spinning Mills Amid a Tighter Domestic Crop
The policy intervention directly addresses anxieties raised by composite spinning and denim mills in Ahmedabad, Kalol, and Saurashtra. The 2026–27 domestic cotton crop is projected below 29 million bales due to uneven late-monsoon rain and pest pressures, pushing domestic Shankar-6 prices above ₹9,000 per quintal.
By keeping the import pipeline free of customs duties, Indian mills can continue importing contamination-free and extra-long staple (ELS) cotton from suppliers in the United States, West Africa, and Australia without paying landed tariff penalties, helping cool domestic lint price spikes.
Balancing Farmer Remuneration with Mill Viability
The government noted that the extension aims to reduce input costs across the domestic textile and apparel value chain while safeguarding farmer interests. Because domestic market arrivals of raw seed cotton (kapas) are currently commanding ₹9,050 to ₹9,250 per quintal—well above the official Minimum Support Price (MSP) floor of ₹8,267 to ₹8,667 per quintal—duty-free imports will stabilize mill procurement without depressing farmer realization below MSP benchmarks.
Industry Reactions: CITI & Exporters Welcome Move
The Confederation of Indian Textile Industry (CITI) and regional associations across Gujarat have welcomed the notification. Trade leaders noted that the extension provides immediate price visibility for yarn spinning contracts through the end of the year.
This formal order resolves the regulatory uncertainty reported in our earlier dispatches on the October 31 expiry and the pending December extension.