Mills and cotton traders may get two more months of duty-free imports. According to three government and industry sources quoted by Reuters on 26 October 2026, India is likely to extend the waiver of the 11% customs duty on raw cotton until at least the end of December. An order is expected once inter-ministerial consultations are complete. The finance, commerce and textile ministries did not comment, and no notification had been issued at the time of writing.
The current waiver runs from 1 June to 31 October 2026. If no order comes before then, the 11% duty is due to return on 1 November.
Why an extension is being considered
- Prices stay high: domestic cotton is trading above ₹9,000 per 100 kg, above the government's support price for the new season, instead of easing as it usually does in October.
- Smaller crop: trade estimates put the 2026-27 crop below 29 million bales (2.9 crore bales), against demand of more than 34 million bales. Patchy monsoon rain, pests and older seed varieties have hurt yields, with declines reported in Gujarat, Maharashtra, Telangana and other states.
- Tight stocks: the stock-to-use ratio is about 31%, the lowest in five years.
- Imports already rising: cotton imports rose 63% to about US$1.1 billion in April–September.
Will it lower prices?
Analysts expect more imports to help cool domestic prices, and S&P Global analyst Dipanshi Agarwal said an extension could weigh on local rates. But a trader at a global trading house cautioned that higher US cotton futures, costly freight and a weaker rupee may limit how much extra cotton actually arrives, even with the duty removed.
The Confederation of Indian Textile Industry wants a longer fix. Secretary-general Chandrima Chatterjee said India should remove the import tax for an extended period, as it raises costs and hurts competitiveness against Vietnam and Bangladesh.
This article updates our earlier report on the 31 October deadline. We will update it again when the government issues its order.