The government said farmers’ interests will remain protected through the Minimum Support Price mechanism, with cotton MSP recently increased for the 2026-27 season.
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The Finance Ministry on Saturday announced that it would exempt cotton imports from customs duty for five months, starting June 1. As of now, the duty is 11 per cent.“To augment the availability of cotton for the Indian textile sector, the Central Government has temporarily exempted all customs duties on import of cotton from June 1, 2026, till October 31, 2026,” the Ministry said after the Central Board of Indirect Taxes and Customs (CBIC) issued a notification. “The temporary duty exemption is expected to reduce input costs across the textile and apparel sector, thereby providing a targeted relief to manufacturers and consumers, while also keeping the interests of domestic farmers in mind,” the Ministry added.The duty was last removed between August and December 2025, when steep US tariffs had begun hurting manufacturing and investments. The industry, which is the country’s second-largest employment provider, requires stable access to high-quality cotton. In view of the persistent demand–supply gap, the government has announced an import duty exemption.Move aimed at lowering costs and boosting competitivenessAccording to officials, the decision is expected to stabilise the input costs across the textile value chain, including yarn, fabric, garments, and made-ups, providing relief to manufacturers and consumers alike. This strategic intervention ensures that the textile sector remains globally competitive while safeguarding the interests of domestic cotton farmers. Most imports cater to specialised industrial requirements or brand-linked export contracts and do not replace domestic cotton.Affordable, high-quality cotton strengthens India’s position in export markets, reviving orders for small and medium enterprises as well as export-oriented units. The textile-apparel value chain employs over 45 million people, and a stable cotton supply is crucial to prevent job losses and encourage industry growth. Consistent raw material supply expected to spur the production of higher-value fabrics and garments, supporting the government’s ‘Make in India’ and domestic manufacturing goals, officials added.MSP support to protect farmers’ interestsThey also said that farmers’ interests are safeguarded through the Minimum Support Price (MSP) mechanism operated by the Cotton Corporation of India Ltd. (CCI), which ensures that farmers receive at least 50 per cent above their cost of production. For the 2026–27 marketing season, the Cabinet Committee on Economic Affairs increased the Minimum Support Price (MSP) for cotton by ₹557 per quintal. The new rates are fixed at ₹8,267 per quintal for medium-staple cotton and ₹8,667 per quintal for long-staple cotton.Imported cotton often meets specialised industrial requirements and does not substitute for domestic cotton. Most imports occur during lean periods or when domestic stocks are insufficient, which minimises competition with peak domestic procurement periods. The government monitors cotton prices closely and retains the flexibility to impose safeguards as and when required, the officials said.Published on May 30, 2026
