India expected to extend duty-free cotton imports through December, sources say
INDA•India is expected to extend its exemption from an 11% cotton import duty through December, which could lower costs for textile mills and increase imports. Domestic cotton prices are above 9,000 rupees per 100 kg, while output is likely to fall below 29 million bales in 2026-27 against demand of more than 34 million.
1. Duty exemption expected to continue
India is expected to extend its duty-free cotton import window for another two months, through December, three government and industry sources said. The government waived the 11% customs duty for five months from June 1 through October 31 to boost supplies during the lean season.
2. Prices and supply pressures
Domestic prices are above 9,000 rupees ($94.80) per 100 kg, higher than the new-season floor price of 8,717 rupees. Patchy monsoon rains, pest attacks and outdated genetically modified seeds have weighed on crop prospects. Trade estimates put 2026-27 output below 29 million bales, compared with demand of more than 34 million.
3. Import costs remain a constraint
India's cotton imports rose 63% year-on-year to $1.1 billion in the first six months of the fiscal year. Higher US cotton futures, elevated freight costs and a weaker rupee could limit imports even if the exemption is extended. Textile industry representatives have called for a longer-term removal of the import tax.
